Former Fed President Warns U.S. Needs Stable Dollar as Debt Nears $40 Trillion

Robert Kaplan says currency stability is more important than boosting exports as national debt balloons.

Jan. 31, 2026 at 3:15pm

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As the U.S. national debt approaches $40 trillion, a former Federal Reserve president is warning that the country needs a stable dollar rather than a weaker one to boost exports. Robert Kaplan, the former president of the Dallas Fed, said that with such high levels of debt, currency stability should take priority over export growth.

Why it matters

The U.S. dollar's status as the world's reserve currency has given the country an "exorbitant privilege" to borrow money at lower rates. However, concerns about the sustainability of the national debt if the dollar's dominance fades have grown, especially as President Trump's policies have created doubts about U.S. financial leadership.

The details

The U.S. dollar index has fallen 10% over the past year, which President Trump has welcomed as boosting exports. However, Kaplan argued that with $39 trillion in national debt on its way to over $40 trillion, "stability of the currency probably trumps exports." He pointed to the overall strength of the U.S. economy and prospects for robust growth as continued draws for investors, even as some seek alternative safe havens like gold.

  • The U.S. national debt currently stands at $38.57 trillion, according to the Peter G. Peterson Foundation.
  • The U.S. dollar index has plunged 10% over the last year and 1.2% this month alone.

The players

Robert Kaplan

The former president of the Federal Reserve Bank of Dallas.

Donald Trump

The President of the United States who has welcomed the dollar's recent decline.

Scott Bessent

The U.S. Treasury Secretary who reaffirmed the U.S. has a strong dollar policy and denied rumors of an intervention to prop up the yen.

Robin Brooks

A senior fellow at the Brookings Institution who argued that a falling dollar won't hurt demand for Treasury bonds and could actually help it.

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What’s next

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The takeaway

This case highlights growing concerns in the community about repeat offenders released on bail, raising questions about bail reform, public safety on SF streets, and if any special laws to govern autonomous vehicles in residential and commercial areas.