$27-trillion 'long USA' position: will the world cut exposure?

Foreign investors held a net US$27.6‑trillion 'long' position in U.S. assets, and official U.S. Treasury figures show foreigners bought a net US$1.27‑trillion of U.S. securities in the first 11 months of last year.

Talk of a broad shift away from U.S. assets has returned amid recent U.S. policy moves and geopolitical tensions. The issue centers on how much overseas investors remain willing to hold U.S. stocks and bonds. Analysts note the world is unusually net "long" the U.S., while official data show large recent inflows. The debate is whether those flows will persist as geopolitical relations evolve. Key facts: - Overseas investors hold a net US$27.6‑trillion position in U.S. assets, the largest on record and over 90% of U.S. GDP as measured by the net international investment position (NIIP). - U.S. Treasury data show foreigners bought a net US$1.27‑trillion of U.S. securities in the first 11 months of last year. - Treasury Secretary Scott Bessent noted that reported plans by some Scandinavian pension funds to cut U.S. bond holdings are too small to materially shift global flows. - Deutsche Bank estimates European nations own about US$8‑trillion of U.S. stocks and bonds, roughly double the holdings of the rest of the world combined. Summary: The large net exposure means global financial conditions are closely tied to demand for U.S. assets, and a sustained slowdown in inflows could weigh on U.S. asset values. Whether the world will meaningfully reduce that position is unclear and depends on shifts in policy and alternative markets. Undetermined at this time.