For decades US assets were the world’s default setting – neutral, safe, dependable. From Treasuries to the dollar, they were the bedrock of global portfolios, the financial world’s equivalent of gravity.
But under Donald Trump, gravity is shifting.
In recent weeks President Trump has shaken global markets, not just with tariffs and rhetoric but with something deeper: unpredictability.
The sudden about-face on tariffs, hailed by allies like Stephen Miller and Bill Ackman as a strategic masterstroke, instead spooked markets.
Investors didn’t celebrate – they fled.
The US dollar stumbled. Treasuries behaved more like emerging market bonds than the risk-free instruments they once were. Equity markets faltered too, with US stocks falling even as European and Asian counterparts gained.
This isn’t just noise. It’s the beginning of a new risk profile for the United States – one that adds a political premium to assets that were once immune to such considerations. In short, the US now looks like a country where political volatility matters to the markets.
Trump’s combative style has raised questions around the very foundations of US market appeal: the rule of law, institutional independence and predictable economic policy. These aren’t abstract ideals – they’re the invisible threads holding together decades of investment confidence.
The implication is profound: if investors start to view the US as erratic or partisan to the point of dysfunction, capital will look elsewhere.
Europe, for all its regulation and sluggish reform, is stable. Asia, for all its volatility, is growing. But the US, under Trump, has become a risk.
And unlike temporary blips, this kind of reputational damage can take generations to repair. Markets have long memories. The Trump premium may not just haunt his presidency – it could reshape the investment landscape long after he’s gone.
