Bloomberg: Capital outflows from US assets to EU, China go upward amid economic slowdown

International investors are reducing their exposure to American assets and turning to European, Chinese, and Japanese markets due to growing fears of an economic slowdown in the United States under President Donald Trump’s policies.

“American exceptionalism is starting to crumble. In the current environment, investors are looking to preserve capital,” Schroders fund manager Kelly Wood told Bloomberg.

She noted that funds are becoming increasingly cautious about American assets, diversifying their portfolios with Japanese and European securities.

Since the beginning of the year, the index of Chinese technology companies listed on the Hong Kong Stock Exchange has surged by nearly 20%, while the euro has appreciated by approximately 7% since February.

Additionally, investors have ramped up purchases of Japanese and Australian government bonds.

Analysts attribute the capital outflow to growing expectations that the US Federal Reserve will resume interest rate cuts amid signs of an economic slowdown. This shift in monetary policy outlook has prompted global investors to seek alternative markets to mitigate risks.

By Khagan Isayev