Hong Kong – A significant shift in capital flows is anticipated as some investors who moved funds out of the U.S. Four years ago may not return them, according to a report published Saturday by Yahoo Finance.
The analysis, penned by High Ming, suggests that a portion of the capital that exited the U.S. During a period of rising interest rates may now find better returns elsewhere, or even regret the initial move as U.S. Interest rate trends evolve. The report highlights a pattern where funds initially sought higher liquidity in U.S. Money market funds when the Federal Reserve rapidly increased interest rates in 2022, with those funds growing from approximately $5.1 trillion in 2022 to over $7.2 trillion by 2025.
However, the report cautions that a substantial return of these funds, often referred to as a “return tide,” is not guaranteed to significantly boost asset prices. Two conditions are cited as crucial: a substantial volume of returning funds and a relative lack of liquidity in the destinations receiving the capital. Without both, the impact will be limited.
The analysis points to CME rate futures predicting a decline in the federal funds rate from the current 3.5% to 3.75% to around 3%, which would diminish the attractiveness of money market funds. This potential shift could incentivize a return to the stock market.
Similar observations were made regarding Hong Kong’s Hang Seng Index, which, like other markets, struggles to sustain upward momentum. A Facebook post from Yahoo HK Finance noted that the Hang Seng’s performance mirrors past patterns of initial gains followed by declines, a trend also observed in the Dow Jones Industrial Average, which began to outperform the Hang Seng in 2019.
Another Yahoo Finance report from December 6, 2025, predicted that the return of capital would drive gains in the U.S. Stock market in 2026.
