Key Facts
• July 3, 2025: UBS Asset Management released survey results targeting central bank reserve managers.
• 65% of respondents believe the Federal Reserve’s independence is at risk.
• 47% foresee U.S. rule of law deterioration impacting asset allocation significantly.
• 35% suggest the U.S. may push allies to shift to ultra-long zero-coupon bonds.
• Survey included responses from approximately 40 central banks.
• 29% are considering reducing exposure to U.S. assets due to recent developments.
• Dollar accounts for 58% of global foreign reserves; 80% expect it to remain the primary reserve currency.
• 52% plan to increase gold holdings in the next year; 39% aim to boost domestic gold reserves.
• Euro, yuan, and cryptocurrencies are expected to benefit most from global changes over five years.
• Dollar fell to 9th place in asset preference rankings, with yuan leading short-term growth at 25%.
Summary
A UBS Asset Management survey of central bank reserve managers highlights growing concerns over the Federal Reserve’s independence, with 65% of respondents identifying it as a risk. Additionally, 47% believe U.S. rule of law deterioration could significantly impact asset allocation. While the dollar remains dominant, accounting for 58% of global reserves, its position faces challenges, with 29% of respondents considering reducing U.S. asset exposure. Gold is gaining traction, with 52% planning to increase holdings, reflecting concerns over sanctions and geopolitical risks. Over the next five years, the euro, yuan, and cryptocurrencies are expected to benefit most from global shifts, while the dollar’s preference ranking has dropped significantly. Despite these trends, 80% of respondents still view the dollar as the world’s primary reserve currency.
