Know More. Risk Better. EM-ification of the U.S.
Jun 19, 2025
Mark Rosenberg, founder of GeoQuant and a PhD in political science, discusses the alarming rise of U.S. political and geopolitical risk. He highlights how social polarization and institutional conflict are aligning U.S. risk profiles with those of emerging markets. The conversation dives into the ripple effects on Treasury yields and equity markets amidst the backdrop of Middle East tensions. Rosenberg offers data-driven insights on the evolving landscape and the implications for investors navigating these complexities.
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US Political Risk Mirrors Emerging Markets
- The U.S. is experiencing rising social polarization and institutional conflict similar to emerging markets.
- This shifting political risk profile differs markedly from traditional developed market stability.
Rising US Political Risk Quantified
- Political risk scores for the U.S. have risen from 34 to 42 since 2016, aligning it more with countries like Hungary.
- Social conflict and institutional risks have increased even more sharply, driving policy risk upward.
Political Risk Lifts Treasury Yields
- Elevated U.S. political risk has contributed to higher Treasury yields beyond macroeconomic factors.
- Investors should add a significant political risk premium to yield forecasts, reflecting an emerging market-like environment.