President Trump’s escalating rhetoric against Federal Reserve Chair Jerome Powell shook financial markets to kick off the week and sparked a broader debate about the role of “safe haven” assets in the face of global and economic uncertainty.
Risk-off investments like the US dollar and long-term bonds, typically viewed as historical hedges against volatility, aggressively sold off on Monday, matching the stock market’s sharp decline. The 10-year yield (^TNX) surged back above 4.4% while the dollar (DX-Y.NYB) dropped to its lowest level since 2022.
Early trading on Tuesday saw a bit of a reprieve, but not much. The 10-year yield continued to trade around 4.4% while the US dollar index also wavered below the 100 level, a key psychological and technical milestone.
It’s an unusual development: Instead of flocking to safe havens like bonds or US currencies, investors appear to be pulling back — a rare dislocation Wall Street strategists have dubbed the “sell America” trade.
Investors accelerated that shift in sentiment with strong moves into commodities like gold (GC=F) and speculative positions such as bitcoin (BTC-USD). Gold rallied to yet another record on Tuesday, and bitcoin traded near $91,000 for the first time since February, a clear signal that investors are seeking non-dollar-denominated, globally accepted stores of value.
Fears of political interference in monetary policy seemed to have triggered Monday’s sharp sell-off, but the exact catalyst remains unclear as investors continue to react to a US economy already under pressure from tariffs, slowing growth, and escalating geopolitical tensions.
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“This is not a good spot to be in in terms of narrative,” Ann Berry, founder of Threadneedle Ventures, told Yahoo Finance on Monday. “No one’s betting against America, but no one’s saying, ‘Oh, we should be going all in over there right now,’ either.”
US equity ETFs saw net outflows of $3.6 billion last week while developed international markets attracted above-average inflows totaling $3 billion, according to JPMorgan. It’s a notable shift given how heavily US markets rely on foreign capital.
As Callie Cox, chief market strategist at Ritholtz Wealth Management, said in a client memo Monday, overseas investors own nearly a third of US equities and more than a quarter of US government debt. They’ve also been net buyers in 70% of months over the past decade.
“Wall Street is America’s secret weapon of global dominance,” Cox said. “Why? Because we have innovative companies, strong institutions and a stable rule of law. Every one of those factors has been called into question lately.”
