Dollar decline and Iran conflict (with David Weston)

Ken Rogoff discusses the gradual decline of the US dollar's dominance, accelerated by the Iran conflict, US fiscal problems, and China's push for yuan use. The dollar's status is eroding slowly due to external pressures (multipolar system) and internal issues (debt, political gridlock).

Yields up , medium term, interviewee implicit

implicit

NDX

RUT

Oil

Metals

USD cautious down , long term, interviewee explicit

explicit

Harvard 8.0
University
Ken Rogoff 9.0

Dollar decline and Iran conflict (with David Weston)

dxy

The dollar's market share reached an incredible peak about 10 years ago... we're losing... it's a slow-moving thing.

3 calls

-3

no reliable edge (random outcomes)

4/3/2026 12:20:17 AM	long term cautious down	60 days later	+0.09%	-0.05%
1/31/2026 3:00:44 PM	medium term cautious down	21 days later	+0.09%	-0.05%
9/17/2025 1:00:49 PM	medium term down	20 days later	+1.54%	-1.54%

Show all 3 dxy results

yields

Rogoff states the Iran war has raised global interest rates and the US is the biggest debtor, losing most when rates go up. This implies upward pressure on yields.

David Weston

Introduces the topic of the US dollar's decline in relation to the Iran conflict, referencing Ken Rogoff's book 'Our Dollar, Your Problem'.
Ken Rogoff

The Iran conflict will affect the dollar's decline, but the outcome is uncertain. It could go either way depending on US success or strategic defeat. The underlying dynamic of dollar decline was already in motion.
David Weston

Asks if currency strength reflects military strength, referencing historical examples.
Ken Rogoff

Military strength is a piece of being the dominant currency, but the dollar's market share peaked 10 years ago. Military power affects negotiations on IMF, banking regulation, etc.
David Weston

Asks if lack of US triumph over Iran would undermine Gulf states' confidence in the dollar.
Ken Rogoff

Gulf states are an important anchor for the dollar, but their role is not as critical as China's. Saudi Arabia is still pegged to the dollar, but it's unclear how long that will last.
David Weston

Asks if the yuan will benefit from Iran selling oil in yuan.
Ken Rogoff

China is also doing transactions in crypto to avoid sanctions. The Iran war has raised global interest rates, adding pressure.
David Weston

Asks what metrics to use to gauge the dollar's relative prominence and if he was surprised the dollar wasn't a safe harbor during the Iran conflict.
Ken Rogoff

The premium on long-term US debt is gone. On short-term debt, there's still a premium. The US is losing the 'exorbitant privilege'.

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