Financial Times: Investors flee the United States due to Trump’s financial chaos
The Financial Times reported that major investors are seeking to reduce their exposure to the US bond market due to what they describe as the effects of Trump’s trade war and the country’s growing fiscal deficit.
This comes as investors grow increasingly skeptical about the ability of US bonds to serve as a safe haven in times of crisis.
US debt markets have been battered in recent days after the House of Representatives passed Trump’s so-called “big, beautiful” tax bill, which is expected to lead to a sharp rise in public debt.
This bill, promoted by the White House, has reopened the debate about whether the United States is heading toward an unsustainable fiscal path.
According to the Financial Times, growing concerns about government borrowing levels come after US Treasury bonds experienced sharp fluctuations last month, coinciding with a new wave of tariffs launched by Trump on what he called “Liberation Day” on April 2.
During these turmoil, bonds failed to provide traditional protection to investors as a safe haven during market crises, increasing the tendency toward international investment diversification.
“The United States is no longer the only safe haven… It has become a country in deep financial turmoil,” said Vincent Mortier, chief investment officer of European asset manager Amundi.
Although investment officials assert that the US dollar will remain the global reserve currency for the foreseeable future, investors are concerned about the size of the federal budget deficit and the repercussions of protectionist policies, pushing them towards European and Asian markets.
The report added that the turmoil sparked by Trump’s trade war has highlighted the need to diversify investment portfolios globally, especially with markets such as Europe, Japan, and Australia achieving strong returns recently.
