by Wolf Richter
The dollar’s role as dominant global reserve currency is at risk if the Fed fails to crack down on inflation.
We’ve seen the headlines in recent days. “Worst Bond-Market Drawdown on Record.” Drawdown means drop in prices. “Global Bond Market loses $2.6 Trillion,” was another one. This was based on the Bloomberg Global Aggregate Bond Index, which tracks total returns of government and corporate bonds. And this index of global bonds has plunged 11% from the high in January 2021, the biggest percentage decline in the data that go back to 1990.
The drawdown has now edged past the 10.8% drop in the global bond index during the financial crisis in 2008.