A more balanced U.S. trade relationship would structurally reduce the flow of dollars abroad, which would in turn reduce the demand for certain U.S. assets. Overseas investors hold enormous amounts of U.S. assets that are in part financed by tens of trillions of dollars earned through trade. While it is not possible to trace the precise flow of dollar financing, aggregate data suggests they tend to reinvest their dollars into U.S. fixed income securities. In […]