Why money is quietly fleeing US markets 💸

Added: 2026-05-27

[00:00:00]But, now that's changed, because Japan's interest rates are going up, which means no more borrowing free money and a change of incentive.

[00:00:10]Meaning, money right now could be leaving dollar-denominated assets and going back to their homeland, where interest rates are high enough to make sense keeping that money at home.

[00:00:23]Now, yes, technically US interest rates are higher than Japan's, but once you factor in the cost of converting yen into dollars and back and forth and the currency hedging costs, the yield advantage basically disappears. In some cases, it even turns negative. So, whether you're a Japanese pension fund or a global hedge fund, it now makes more sense to sort of unwind those trades and to sell those dollar assets and to bring the money back home. That is a very big deal.