Recent data from the US Treasury has shown the full extent of outflows from US assets after the US administration’s Liberation Day announcements on tariffs.
Between foreigners selling US assets, and US residents buying foreign assets, $94 billion left US public markets. This is the fourth-largest outflow since data began in 1978. That includes outflows around the Covid pandemic, a quite unusual period, so the April outflow was arguably the second higher during ‘normal’ times.
The outflows have contributed to the weakness in the US dollar this year. The question now is whether the outflows will persist as foreigners continue to ‘sell America’.
Time will tell, but more recent data on purchases of US exchange-traded funds (ETFs) by European investors have shown flows returning to the country.
