Amid rising concerns over mounting government debt and US President Donald Trump’s policy flip-flops, Nomura argued that the AI boom is masking a growing American risk premium, leaving global markets vulnerable to an AI setback because of their heavy concentration in dollar assets.
In its latest special report, Nomura highlighted how the rest of the world’s exposure to US dollar assets has become so concentrated that an AI setback could trigger a depreciation in the dollar. Typically, investors subscribe to the TINA — “there is no alternative” — view when it comes to US dollar assets. However, Nomura challenges this assumption in its report.
