‘Large selection of overseas traders’ skittish about making an investment in America, longtime investor Rebecca Patterson warns

Global traders are present process a structural reconsider in their publicity to U.S. markets, in step with financial knowledgeable Rebecca Patterson.

Patterson, who served as Bridgewater’s leader funding strategist, contends they are progressively lowering publicity to U.S. property and the affect might be vital. Her prediction comes after having conversations with members in closing week’s World Bank and International Monetary Fund conferences in Washington.

“There are a large number of foreign investors who are worried not only about tariffs, but just about America’s reliability as a partner,” Patterson stated Monday on CNBC’s “Fast Money.”

Outside of the Trump management’s tariff coverage, she reveals overseas traders and policymakers are shedding religion within the U.S. on broader fears in regards to the attainable weaponizing of capital markets to succeed in its financial objectives.

That might put world traders’ U.S. holdings in danger, in step with Patterson. Foreigners held greater than $31 trillion of U.S. property as of closing June, in step with the newest U.S. Treasury information. That’s an building up of $4.4 trillion from the prior 12 months. The positive factors got here as U.S. markets reached all-time highs, thank you partly to megacap tech and the unreal intelligence business.

“They are looking at a huge U.S. allocation that has built up over the last several years and saying, ‘maybe we should have a little bit less, just trim off the tops’ — basically, have a risk premium on U.S. assets because we have so much uncertainty,” she stated.

Even a small relief in world participation may provide an issue for U.S. markets, Patterson warns.

“Pretend you’re the chief investment officer of a major overseas pension fund or sovereign wealth fund. I’m going to take 2% off my U.S. stocks, 2% off my U.S. bonds, a 4% shift,” she stated. “That’s $1.2 trillion that is going to be leaving the U.S. now.”

A possible $1.2 trillion sell-off represents 2.3% of the S&P 500′s general marketplace capitalization, as of Friday’s shut. Still, Patterson emphasizes the capital flight won’t occur in a single day.

“These investment committees will take months to think about things. They’ll have a meeting, they’ll have a board approve it and then it gets implemented. But what this is, is a slow bleed of support out of the U.S. markets, either going back to home markets or into new opportunities, or things like gold,” stated Patterson.

U.S. shares have extensively underperformed different world equities to this point in 2025, with the S&P down 4.7% in that point. Europe’s broad-based STOXX 600 index has won 5.7% this 12 months, whilst the MSCI AC Asia Pacific Index has risen 2.4% over the similar length, consistent with FactSet.