The first half of 2025 has marked a transformative chapter for the U.S. and global economies. Investors holding U.S. dollars (USD) now face a volatile environment shaped by dramatic policy shifts from the returning Trump administration and a more cautious Federal Reserve. With inflation staying stubbornly high and yields elevated, the key question is: How can investors protect the value of their USD and position themselves to benefit from the shifting landscape?

This article breaks down the latest U.S. policy developments, presents tailored USD investment strategies by risk profile, and highlights why U.S. Treasuries are foundational assets for capital preservation and growth.

1.  What’s Changed? U.S. Policy Shifts in Early 2025

Federal Reserve: Holding the Line

The Federal Reserve started 2025 with the federal funds rate at 4.25%–4.50% after 2024 rate cuts. Persistent inflation, fueled by trade disruptions and tariff policies, prompted a pause in further reductions. In May 2025, the Consumer Price Index (CPI) rose by 0.1% (below the expected 0.2%), with annual inflation at 2.4%, meeting consensus forecasts. Unemployment remained stable at 4.2%, but the recent Israel-Iran skirmish added uncertainty to the Fed’s outlook, forcing a delicate balance between growth and price stability.

Trump Administration: A New Wave of Economic Disruption

President Trump’s return to office has brought sweeping economic changes:

·         Broad-Based Tariffs: As of April 2025, a minimum 10% tariff applies to all imports, with rates of up to 50% on goods from 57 countries—including China, Mexico, Canada, and the EU. Key sectors affected include semiconductors, autos, steel, and pharmaceuticals. The administration estimates over $5 trillion in revenue over the next decade—but retaliatory tariffs and reduced exports are already impacting U.S. GDP and possibly stoking inflation further down the line.

·         Selective Trade Deals: Despite the tariff hikes, the administration has negotiated some targeted deals. As of June, US tariffs on Chinese goods would be set at 55% (up from 30%), while China's tariffs remain at 10%. With the U.K., they finalised the trade agreement struck in May, lowering tariffs on certain British goods like cars, aerospace equipment, and steel and aluminium.

·         Massive Deregulation: The “10-to-1 Deregulation Initiative” mandates the repeal of ten regulations for every new one introduced, aiming to cut compliance costs and spur business formation.

·         Executive Actions: Over 157 executive orders and dozens of new policies have been enacted, affecting taxation, energy, labour, and tech. New tax cuts are projected to add $2.4 trillion to the federal deficit over the next decade.

The Net Effect: Global uncertainty, a slowdown in trade, and sustained inflationary pressure—conditions that demand caution and adaptability from investors.

2.  Investment Strategies: Protecting and Growing Your USD by Risk Profile

Conservative Bond Investors

• USD Money Market Funds (MMFs) / Enhanced Liquidity Funds (ELFs):
   Park idle USD in high-quality MMFs or ELFs, such as Amundi Funds Cash USD A2 (C) USD or iFAST USD Enhanced Liquidity A USD. These funds offer decent yields, have a track record of steady NAV growth, and help largely preserve capital while providing some protection against inflation.
• Short-term U.S. Treasuries:
  Treasury bills (T-bills) and short-duration notes (2 years or less) are among the safest instruments, offering yields above 4%. These are ideal for those prioritizing capital safety and liquidity while waiting for better opportunities.

Balanced Bond Investors

• Blend of MMFs/ELFs and Treasuries:
  Combine MMFs/ELFs with a ladder of U.S. Treasuries (2- and 10-year notes) to balance liquidity, safety, and slightly higher returns. This approach allows for flexibility should market opportunities arise.
• Short-Term Investment Grade Bonds:
  Consider short-duration, high-quality corporate bonds for modest yield enhancement, though with slightly higher risk than Treasuries.

Aggressive Bond Investors

• Longer-Term Treasuries:
  Consider longer-term U.S. Treasuries (10-year notes and above) to balance liquidity, safety, and better yields.

• Medium-Term to Long-Term Investment Grade Bonds:
  Consider high-quality corporate bonds with longer durations for more attractive yields.
• Selective High-Yield Bonds:
  With U.S. high-yield indices offering yields near 7%, aggressive investors may allocate a portion to these, though they must accept higher credit risk.

3.  U.S. Treasuries: A Core Tool for Preservation and Opportunity

In all the above risk profiles, one can see that the common component across them are U.S. Treasuries. No matter what risk profile you have, there is always a place for U.S. Treasuries in your portfolio.

What Makes U.S. Treasuries Compelling in 2025?

• Attractive Yields:
  As of June 2025, U.S. Treasuries continue to offer compelling yields: the 2-year at 4.04%, the 10-year Treasury stands at 4.51%, and the 30-year at 4.97%—levels that are above the long-term average and historically appealing for both income seekers and capital preservers. In comparison, the upcoming July Singapore Savings Bond (SSB) offers a low 2.06% yield return for a 1-year period and an average return per year of 2.49% if held for 10 years.
• Safety and Liquidity:
  Treasuries remain the global benchmark for safety, backed by the full faith and credit of the U.S. government. Their deep liquidity allows investors to enter and exit positions efficiently, even during periods of market stress.
• Market Dynamics:
  Recent volatility in yields, driven by strong employment data, ongoing trade negotiations, and fiscal policy debates, has created opportunities for both long-term investors and active traders to benefit from price movements and elevated yields.
• Potential reversion of USD/SGD:
The USD has depreciated against the SGD since the beginning of 2025, falling from 1.37 to the current level of 1.28 SGD per USD. Investors who believe the USD will strengthen against the SGD may find this an opportune time to convert SGD to USD and invest in USD-denominated assets such as treasuries. Potential catalysts for the USD to strengthen against the SGD include robust US economic performance, increased trade deals between the US and its trading partners, and greater clarity on reducing its current budget deficits.

How Investors Can Access and Trade U.S. Treasuries on FSMOne

FSMOne has democratized access to U.S. Treasuries through our Bondsupermart Live platform, making it easier for retail investors to participate in the U.S. government bond market:

• Real-Time Trading:
  Investors can buy and sell a wide selection of U.S. Treasuries—including Treasury bills, notes, and bonds of various maturities—at live, transparent prices. This enables quick response to market changes and interest rate movements.
• Low Minimum Investment:
  The platform allows for small-lot purchases, making U.S. Treasuries accessible to both new and experienced investors. Investors can now invest in U.S. Treasuries with as little as USD 100.
• Portfolio Consolidation:
  U.S. Treasuries held via FSMOne can be managed alongside other asset classes, such as funds, stocks, and ETFs, giving investors a holistic view of their portfolios.

How U.S. Treasuries Fit Different Needs

Investor Type	Use Case for Treasuries	Key Benefits
Conservative	Buy-and-hold for capital preservation	Safety, steady yield, liquidity
Balanced	Laddering maturities for flexibility	Balance between yield and access
Aggressive	Trading live Treasuries or switching maturities	Potential for capital gains
Retirement-focused	Income generation, principal protection	Low risk, predictable cash flows
Short-term opportunist	Parking funds while waiting for risk assets to correct	Earn yield, preserve optionality

Profiting from Treasuries: Trading and Investing

• Short-Term Trading:
  Treasury bills/notes and ETFs allow investors to speculate on rate movements. For example, if economic data suggests rates will fall, buying Treasury bills/notes can generate quick profits as bond prices rise.
• Long-Term Investing:
  For retirement or wealth preservation, holding Treasuries locks in current high yields, providing a predictable income stream and reducing portfolio volatility.

Treasuries in Retirement Planning

• Principal Protection:
  Especially for those nearing or in retirement, Treasuries offer a way to safeguard principal while earning modest returns.
• Laddering Strategy:
  By staggering maturities, investors can manage reinvestment risk and ensure regular access to funds.

Closing Note

As 2025 unfolds with persistent policy uncertainty, inflation, and elevated yields, safeguarding USD value demands strategic, risk-conscious action. Money market funds and U.S. Treasuries remain reliable options for capital preservation and short-term gains. For those seeking more upside, tactical trades in Treasuries or selective high-yield bonds offer opportunity—though not without added risk.

Ultimately, Treasuries stand out as a trusted, flexible, and accessible tool to navigate uncertainty and seize yield. To learn more or begin investing in U.S. Treasuries, contact our licensed advisors at advisory@fundsupermart.com. Above all, U.S. Treasuries remain a versatile tool—offering safety, liquidity, and a hedge against both market volatility and policy uncertainty. Whether your goal is to wait out the turbulence or to actively seek profit from interest rate moves, Treasuries deserve a central place in your short-term USD investment strategy.

Ready to invest in U.S. Treasuries? Contact our licensed advisors at advisory@fundsupermart.com to get started.