America's $28 trillion problem: The Fed just said foreign investors now own way more of the US than it owns of them

The article summarizes New York Fed research showing a $28 trillion shortfall between U.S. foreign assets ($41 trillion) and foreign holdings of U.S. assets ($69 trillion), a gap equal to roughly 90% of U.S. GDP. The Fed warns the historical U.S. “rate of return advantage” has eroded — a $260 billion surplus in 2019 fell to near zero by 2024–25 and higher interest rates have turned payouts to foreign holders into a growing servicing burden (about $450 billion hit in 2025). The shift increases sensitivity to rates, helps keep mortgage costs elevated, and amplifies downside pressure on U.S. domestic finances and markets.