By Micah Jonah
January 29, 2026
A senior Harvard economist has warned that emergency support tools used by the United States Federal Reserve to stabilize global financial markets during crises could be influenced by political interests.
Kenneth Rogoff, a former chief economist of the International Monetary Fund and now a professor at Harvard University, said the Federal Reserve’s dollar swap line facilities could be used as leverage by the U.S. government during international disagreements. These facilities allow foreign central banks to borrow U.S. dollars during periods of financial stress and were heavily used during previous global financial crises.
Rogoff explained that the strategic use of the U.S. dollar in global finance has existed for decades, but future administrations could expand that influence by linking financial support to trade or diplomatic negotiations.
Concerns about unpredictable U.S. policies have increased since President Donald Trump returned to office, particularly following renewed tariff threats against several trading partners. Rogoff suggested that financial tools could also be applied alongside trade pressure if disputes intensify.
Some European officials have previously discussed reducing dependence on U.S. financial support by strengthening internal financial safety systems among central banks. Analysts say this reflects growing concern about relying too heavily on Washington during global market shocks.
Although the dollar has recently weakened, Rogoff noted that its long term decline began before the current administration. Since Trump returned to office, the currency has fallen against major global currencies and is now near its lowest level in several years.
He added that creating alternative financial safety systems requires strong technical structures and long term cooperation among countries, which cannot be achieved quickly.
