Foreign investors shift focus to US stocks over Treasuries

US: The United States is the world's largest economy and the issuer of the dominant global reserve currency through its Treasury market and equity exchanges. Foreign investors have historically viewed its government bonds as core safe-haven assets, but the news highlights a shift where these investors are now directing more capital toward US stocks instead. This change reflects broader concerns about the country's fiscal trajectory and its impact on traditional asset preferences. Market Reallocation: Global capital flows are favoring US equities over government debt for the first time this century outside brief crisis periods, driven by stronger corporate performance amid an AI investment boom. Yield and Sentiment Shift: Higher Treasury yields are coinciding with investor caution toward government bonds, as private sector balance sheets strengthen relative to the public sector. Fiscal and Inflation Pressures: Rapid expansion of US public debt combined with persistent inflation concerns is eroding the traditional perception of Treasuries as unequivocally risk-free assets.