MacroResearchBoard

Not So Exceptional After All? – June 16, 2025

A just-published report provided an update of our views on the U.S. exceptionalism trade. The latter was a long-running theme that resulted in significant overvaluation of U.S. assets, in both absolute terms and relative to global alternatives.

U.S. policies this year have provided a wake-up call for global investors, highlighting the danger of holding excessive allocations to U.S. assets. Consequently, the U.S. dollar has depreciated meaningfully, and U.S. stocks have underperformed.

The unwinding of the prior overshoot will not be a straight-line affair, but the foundations supporting the exceptionalism theme are cracking. The underperformance of U.S. assets will likely be a long lasting trend.