'Sobering' the U.S. Treasury is not playing 'safe haven' role in this moment: Evercore ISI's Guha
Speakers
Krishna Guha
— Vice Chairman, Evercore ISI
Summary
Krishna Guha of Evercore ISI discusses the return of the 'sell America' trade amid trade-policy uncertainty. He argues the base case is still a compromise/de-escalation, but if escalation continues, markets would see risk-off with a lower dollar and higher Treasury yields. He highlights that US Treasuries are not acting as safe havens, forcing investors toward gold, silver, precious metals, and the Swiss Franc, while noting metals are crowded and richly valued. He also says US fundamentals and AI remain attractive but are now overlaid by policy volatility and a tectonic shift in global economic relations.
- Krishna Guha of Evercore ISI says the 'sell America' trade is back.
- Base case remains compromise/de-escalation, not hyper-escalation.
- If escalation continues, risk-off with dollar lower and Treasury yields higher.
- US Treasuries are not performing normal safe-haven role.
- Alternative safe havens include gold, silver, precious metals, and Swiss Franc.
- Metals are crowded and richly valued.
- US fundamentals and AI remain attractive long-term.
- Policy uncertainty and structural global shifts are secular risks.
Ideas
Sell America: short dollar, avoid Treasuries.
If the US pushes further down the trade-escalation route, markets will be risk-off but the US dollar will fall rather than rise and Treasury yields will move higher, because global investors are increasingly averse to US assets and demand a higher US risk premium. This is the 'sell America' trade returning, though de-escalation remains the base case.
Sell America: short dollar, avoid Treasuries.
If the US pushes further down the trade-escalation route, markets will be risk-off but the US dollar will fall rather than rise and Treasury yields will move higher, because global investors are increasingly averse to US assets and demand a higher US risk premium. This is the 'sell America' trade returning, though de-escalation remains the base case.
Gold, silver, Swiss Franc as safe havens.
Because US Treasuries are not performing their normal safe-haven role, capital must seek alternative safe havens; gold, silver, precious metals, and the Swiss Franc are among the few options, though metals are crowded and richly valued.
