Fed’s Musalem Sees No Threat to Dollar’s Reserve Currency Status

Federal Reserve official Musalem pushed back against narratives of de-dollarization, asserting that the U.S. dollar remains firmly entrenched as the world’s primary reserve currency. He noted that no set of conditions currently exists that could displace the greenback from its dominant role.

Musalem highlighted the U.S. as the highest-growth and most innovative economy, underpinned by an effective rule of law. He added that central banks globally have been navigating more frequent supply shocks, a backdrop that has not diminished the dollar’s international standing.

The remarks reinforce the view that, despite diversification of reserves by some nations, the dollar’s deep liquidity and institutional credibility keep it at the center of global finance.