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Macro US Stocks

Nomura: US net liabilities hit 80% of creditor nations’ assets

Nomura warns that AI-driven US growth is boosting inflation and trade deficits, and heavy borrowing by cloud firms is lifting Treasury yields. US net capital inflows and AI-linked stock gains have pushed its net international investment liability to about 80% of all net creditor nations’ combined net assets. If AI stumbles, high US stock valuations and weak fundamentals could trigger a major correction and global risk-off, driving dollar depreciation.

Original source

AI take

The linkage between AI-driven capital inflows and external imbalances is the core tension here. Sustained US asset demand has masked deteriorating fundamentals, but the concentration of flows in AI-linked equities creates a fragile equilibrium. The key risk scenario is a reverse feedback loop, where an AI setback triggers capital outflows, dollar weakness, and a reassessment of Treasury demand. This matters for global investors because US liabilities now represent a systemic concentration risk, making foreign asset allocation decisions more sensitive to US tech sentiment. Whether AI's productivity gains can outpace its financing costs is the open question.

Generated by AI for reference only.

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