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Foreign Retail Money Fuels US Deficit, Ties Dollar to AI

7/10/2026

Summary

Story summary

Deutsche Bank strategist Mallika Sachdeva says the United States now funds its deficit more through foreign equity inflows than Treasury debt.
The shift ties the dollar to the AI-driven technology sector, raising risk.
A 2025 current-account deficit of $1.12 trillion and a trade deficit near $1 trillion underscore the twin-deficit challenge.
Retail investors in Korea and Japan are channeling money into U.S. equities via Japan’s Nippon Individual Savings Account scheme.

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Story summary

Deutsche Bank strategist Mallika Sachdeva says the United States now funds its deficit more through foreign equity inflows than Treasury debt.
The shift ties the dollar to the AI-driven technology sector, raising risk.
A 2025 current-account deficit of $1.12 trillion and a trade deficit near $1 trillion underscore the twin-deficit challenge.
Retail investors in Korea and Japan are channeling money into U.S. equities via Japan’s Nippon Individual Savings Account scheme.