America’s Market Exceptionalism Isn’t Coming Back
With the US’s economic prospects waning, free movement of capital is becoming an Achilles’ heel as investors of all stripes start to flee US assets.
Illustration: David Plunkert for Bloomberg
US President Donald Trump’s ‘America First’ economic revolution has quickly turned into ‘America Last’ as far as financial markets go. So many investors have been dumping US assets wholesale that we recently saw equities, bonds and the US dollar all decline in a self-feeding doom loop that hasn’t only hurt the value of American financial assets. If Trump persists, it threatens to cause an extended bear market and a financial crisis. This is a shock to the financial world that received his election with near-jubilation.
What happened?