The US has long been the world’s dominant investment destination, drawing global savings through its resilient dollar and robust stock market. Over the past two decades, US equities have outperformed Europe, Japan, emerging markets, and China, delivering nearly 17% annual returns since the financial crisis. However, recent trends show global stock performance catching up, while US Treasuries face pressure as yields rise amid fiscal concerns and political indifference.

The AI-driven rally, once a universal booster, now appears constrained, with high valuations and limited new capital. The fiscal outlook, weakened by large deficits and congressional inaction, threatens higher borrowing costs and could unsettle both bond and equity markets. Despite these challenges, the US retains structural advantages: top universities, a reliable legal system, low regulation, abundant energy, a large domestic market, and favorable demographics.

Even if the AI boom stalls, these fundamentals may sustain demand for US private assets. Yet, falling Treasury prices raise discount rates for equities, linking corporate borrowing costs to Treasury volatility. Adjusting exposure—reducing Treasuries while increasing stocks—requires caution, as public and private assets are intertwined through financing and valuation dynamics.