Federal Reserve Kashkari said on Friday that recent market trends show that investors are leaving the US as the safest place to invest as Trump's trade war escalates. He said that in recent days, as US Treasury yields have risen, the dollar has depreciated against global currencies. The trend is the opposite of what you usually see. “Normally, when you see a significant increase in tariffs, I expect the dollar to appreciate. I think the fact that the US dollar fell at the same time makes the claim that investor preferences have changed even more credible.” Kashkari said. He also said, “Investors all over the world regard the US as the best place to invest. If this were true, we would run a trade deficit. As a result, one way it is showing now is that the yield on various types of US assets is declining.” “If the trade deficit falls, investors might say, OK, America isn't the most attractive place in the world to invest, then you'll see bond yields rise.” However, Kashkari pointed out that what he saw was “pressure” in the operation of the market rather than serious chaos.

Federal Reserve Kashkari said on Friday that recent market trends show that investors are leaving the US as the safest place to invest as Trump's trade war escalates. He said that in recent days, as US Treasury yields have risen, the dollar has depreciated against global currencies. The trend is the opposite of what you usually see. “Normally, when you see a significant increase in tariffs, I expect the dollar to appreciate. I think the fact that the US dollar fell at the same time makes the claim that investor preferences have changed even more credible.” Kashkari said. He also said, “Investors all over the world regard the US as the best place to invest. If this were true, we would run a trade deficit. As a result, one way it is showing now is that the yield on various types of US assets is declining.” “If the trade deficit falls, investors might say, OK, America isn't the most attractive place in the world to invest, then you'll see bond yields rise.” However, Kashkari pointed out that what he saw was “pressure” in the operation of the market rather than serious chaos.