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US or China: Whose bubbles will loom larger in 2026?

TOKYO — US President Donald Trump’s unusual fixation on criticizing the Federal Reserve is alarming policymakers and investors worldwide. However, here in Asia, it’s a uniquely personal threat, given that this region is the largest holder of US Treasury securities.

The dollar-is-about-to-crash trade remains something of a widowmaker. Despite a national debt topping US$38 trillion, a Congress in disarray and Trump’s tariffs doing their worst, 10-year Treasury yields are around 4%. Though the dollar is down versus the euro this year, it’s flat versus the yen.

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