According to ChainCatcher, citing Jinshi, Federal Reserve's Kashkari stated on Friday that recent market trends show investors are leaving the United States, previously considered the safest investment destination, amid escalating trade tensions under Trump.
He noted that in recent days, as U.S. Treasury yields rise and the dollar depreciates against global currencies, the trend is contrary to what is typically observed. "Normally, when you see significant tariff increases, I would expect the dollar to appreciate. I believe the fact that the dollar is simultaneously falling makes the argument about investor preference shifting more credible," Kashkari said.
He further added: "Investors worldwide have viewed the United States as the best investment location. If that were true, we would experience a trade deficit. One way this is manifesting is through lower yields on various U.S. assets. If the trade deficit decreases, investors might say, 'Well, the U.S. is no longer the most attractive investment destination in the world,' and then you would see bond yields rise."
However, Kashkari pointed out that what he sees is "stress" in market operations, not severe disruption.
