Reframing the “Sell America” Narrative

The resurgence of the “Sell America” narrative is driven by uncertainty, not fundamentals.

President Donald Trump speaks to Fed Chair Jerome Powell during a tour of the Federal Reserve in Washington, D.C., Thursday, July 24, 2025. (Official White House Photo by Daniel Torok)

Recent market volatility has reignited discussion around the “Sell America” trade, but I believe this narrative is being overstated and mischaracterized. The current pullback across select U.S. assets reflects policy-driven uncertainty, not a fundamental loss of confidence in the U.S. capital markets. Importantly, market behavior to date does not support the conclusion that global investors are meaningfully reducing exposure to U.S. risk assets.

The trigger for the latest bout of volatility—the Department of Justice subpoenas involving Federal Reserve leadership—has understandably unsettled markets. Any perceived challenge to the independence of the Federal Reserve commands attention. However, the market reaction has been measured rather than disorderly, suggesting investors are pricing in elevated uncertainty, not systemic risk. The simultaneous decline in the U.S. dollar, pullback in equities, and rise in long-duration Treasury yields is best interpreted as risk repricing, not capital flight.

MacroMicro. (n.d.). US Dollar Index vs. S&P Goldman Sachs Commodity Index/S&P 500 [Chart]. MacroMicro. https://en.macromicro.me/charts/34538/us-dollar-index-vs-sp-gsci-index-divided-by-sp500

History offers useful context. Throughout 2025, markets repeatedly faced trade disputes, fiscal policy shifts, and geopolitical shocks, yet U.S. equities continued to outperform global peers. Earnings growth remained resilient, liquidity conditions stayed constructive, and foreign participation in U.S. markets remained intact. If last year demonstrated anything, it is that headline risk alone has not been sufficient to drive sustained capital outflows.

What is currently being labeled as “Sell America” is, in my view, largely currency repositioning masquerading as asset liquidation. International investors have reduced unhedged dollar exposure while maintaining allocations to U.S. equities and fixed income on a currency-hedged basis. This distinction matters. Hedging the dollar is not a vote against U.S. assets—it is a tactical response to short-term policy noise.

Where I do believe investors should remain vigilant is around central bank credibility. The Federal Reserve’s independence remains a non-negotiable pillar of U.S. financial dominance. Any sustained erosion in confidence here would warrant a reassessment of risk premiums, particularly in duration-sensitive assets. That said, the current episode remains rhetorical and political, not structural. Markets have not yet priced in a meaningful loss of policy autonomy.

Nash, J. (2025, February 3). Treasury yields long-term perspective: January 2025. ETF Trends. https://www.etftrends.com/fixed-income-content-hub/treasury-yields-long-term-perspective-january-2025/

Cross-border liquidity trends further reinforce this view. While foreign banks have modestly reduced dollar deposits at the Federal Reserve, the magnitude does not suggest a rush for the exits. Instead, it reflects prudent balance-sheet management amid rising uncertainty. These flows bear monitoring, but they do not currently signal a breakdown in global dollar demand.

From a portfolio standpoint, I believe the appropriate response is discipline, not defensiveness. The U.S. continues to offer unmatched liquidity, legal protections, and exposure to secular growth drivers, particularly in artificial intelligence and advanced technologies. Abandoning U.S. assets during periods of policy noise has historically proven costly.

My view is:

The resurgence of the “Sell America” narrative is driven by uncertainty, not fundamentals. Investors should focus on diversification over divestment, monitor developments around Federal Reserve independence, and remain attentive to cross-border liquidity trends—without overreacting to short-term political dynamics.

Markets are repricing risk, not rejecting America.