“The dollar debasement trade was a defining theme in 2025. The more the dollar tanked last year, the more talk of de-dollarization and the end of American exceptionalism. Yet despite the onslaught of headlines screaming of the dollar’s demise and lack of demand for America’s debt, reality proved different: As the world was chattering about ditching the dollar, foreign investors were digging deeper into U.S. securities. That’s the lesson from the latest flow of funds data from the Federal Reserve (Fed), which shows that foreign ownership of U.S. securities hit a record $35 trillion at the end of Q3 2025. The bottom line is, despite an uncertain policy backdrop in the U.S., foreign demand for U.S. securities remains healthy because the U.S. economy is still among the strongest, most resilient and most innovative economies in the world. The growth gap between the U.S. and the rest of the world has only widened this decade, and we’d expect this divergence to continue”
Morten W. Langer
