Economist Warns U.S. Bond Buyback Could Trigger "Yen-Style" Dollar Crash

Renowned economist Robin Brooks warned that the U.S. Treasury expansion of long-term bond buybacks could trigger a currency depreciation spiral reminiscent of the Japanese yen. The announcement followed a spike in thirty-year Treasury yields to near twenty-year highs. Brooks characterized the policy as financial engineering that fails to address structural fiscal deficits projected to reach two trillion dollars. The Bloomberg Dollar Spot Index declined following the report, while gold prices surged past four thousand six hundred dollars per ounce. Critics and market analysts remain divided over the potential for a broad currency crisis. Capital Economics analyst Jonas Goltermann suggested that crash concerns might be exaggerated given underlying economic strength. Meanwhile, Bank of America warned that unsuccessful yield management could further weaken the currency ahead of upcoming midterms. The Federal Reserve continues navigating conflicting signals amid elevated market uncertainty regarding monetary policy paths and future interest rate adjustments across financial markets.