Stephen Jen Quoted in Bloomberg: “Stephen Jen Warns of Fiscal Risk to US Dollar, Bond Haven Status”
Bloomberg, May 5, 2026
n a recent article for Bloomberg, Anya Andrianova examines Stephen Jen’s latest views on the relationship between U.S. fiscal policy, Treasury market credibility, and the dollar’s traditional safe-haven role.
The article draws on today's note by Stephen Jen and Joana Freire "The Left Side of the Dollar Smile Still Curved, for Now", which argues that continued fiscal pressure in the U.S. could have important implications for how investors view both Treasuries and the dollar during periods of market stress.
The article highlights Stephen’s long-standing “dollar smile” framework, which suggests that the dollar can strengthen when the U.S. economy is either very strong or under significant stress. For now, Bloomberg notes, the left side of that smile remains intact, but the article points to concerns that persistent fiscal imprudence and renewed balance sheet expansion could weaken that relationship over time.
As Stephen Jen and Joana Freire wrote:
“quantitative easing could jeopardize the global standing of the US Treasuries and undermine the left side of the dollar smile,”
The piece also places this analysis in the context of recent market moves following the Iran War, where the dollar saw only a mild rally during a brief risk-off period. The broader issue, as framed in the article, is whether U.S. Treasuries can continue to retain their safe-haven status if fiscal risks remain unresolved.
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