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Policy, Politics & Portfolios

Published May 6, 2025

What federal budget, regulatory, and trade decisions could mean for investors

U.S. exceptionalism

The challenge to U.S. exceptionalism from U.S. policies

  • As the Trump administration marked its first 100 days in office last month, key economic-policy reforms continue to move at a rapid pace and plenty of policy uncertainty remains.
  • Such significant policy fluidity puts U.S. and global economic growth at risk. We ask whether the U.S. can remain exceptional — i.e., our favorite regional investment destination among global capital markets.

U.S. exceptionalism: Are we at an inflection point?

  • We believe American exceptionalism will continue based on an array of structural advantages — including more favorable demographics, less regulation, and a more efficient financial market. These and low-cost energy combine to foster a comparatively stronger U.S. entrepreneurial culture.
  • In contrast, we believe China and Europe are two key regions that should suffer more than the U.S. under a global tariff fight.
  • We believe that the U.S. is comparatively better prepared for global economic, earnings, and interest-rate fluctuations.

U.S. exceptionalism and the future of the U.S. dollar

  • Despite the economic costs emerging in the U.S. and globally, we expect the U.S. dollar to keep its preeminent role in global trade and finance.
  • Our equity and fixed-income guidance continues to favor U.S. over international markets, prioritizes especially high-quality U.S. large- and mid-cap equities, and favors selectivity and a preference for the middle part of the maturity spectrum in fixed income.

Article written by:

Investment Strategy Analyst
Global Investment Strategist
Investment Strategy Analyst