When crises erupt, be it war, banking turmoil, or market panic, investors around the world turn to one refuge: US-dollar bonds. This “flight to safety” is not just habit, it’s survival. In a world in which headlines shift by the hour and risks feel unmanageable, US-dollar bonds, especially Treasuries, offer the closest thing to certainty.

The Dollar’s Anchor Role

The US dollar remains the world’s reserve currency, and Treasuries its bedrock. Central banks, sovereign wealth funds, and institutions rely on them because they can be bought or sold instantly, even in the darkest hours of a crisis. No other market matches the depth and liquidity of the US-dollar bond market. When the ground shakes, investors want to know they can move, and US bonds give them that power.

Trust in Policy and Institutions

Confidence is priceless when fear is high. The Federal Reserve, with its long track record of managing inflation and acting as lender of last resort, anchors trust in US assets. Its dollar swap lines, and emergency tools keep funding markets alive, indirectly supporting bond prices. Add to this the transparency of US markets and legal protections for investors, and you see why Treasuries are viewed as “the world’s collateral of last resort”.

The Pull of Safety and Yield

Treasuries also serve a practical role: They are pristine collateral in global finance. In moments of stress, demand for this collateral surge, driving yields down and prices up. And in today’s higher-rate environment, US-dollar bonds don’t just offer safety, they offer income. That combination of protection and payout is rare, and investors know it.

But Not Without Risks

Of course, no haven is perfect. Long-dated Treasuries can swing sharply when interest rates rise. The United States’ growing deficits and debt issuance raise uncomfortable questions about sustainability. And for non-US investors, dollar strength or weakness can magnify or erase returns. Safety is relative, not absolute.

The lesson is clear: In times of uncertainty, you cannot afford to ignore US-dollar bonds. They are the anchor that steadies portfolios when risk assets crumble. But they must be used wisely — short-term Treasuries for liquidity, longer maturities for those willing to ride out volatility, and a mix of corporates for added yield. US-dollar bonds don’t promise perfection, but they deliver something investors crave most: predictability, and in uncertain times, that is everything.

Anna-Joy Tibby-Bell is assistant vice-president, personal financial planning at Sterling Asset Management. Sterling provides financial advice and instruments in US dollars and other hard currencies to the corporate, individual, and institutional investor. Visit our website at www.sterling.com.jm

Feedback: If you wish to have Sterling address your investment questions in upcoming articles, e-mail us at: info@sterlingasset.net.jm

Anna-Joy Tibby-Bell.