Safe havens aren’t behaving like they used to. Here’s what’s changed

When markets buckle, investors usually know where to hide: U.S. Treasurys, the Japanese yen and gold.

But in 2026, that playbook has not worked as expected. Treasury yields have climbed since the Iran war began, the yen has weakened to multi-decade lows against the dollar, and gold has fallen sharply from its January peak.

The reason, strategists say, is that this is not a classic risk-off episode. Inflation fears, higher real yields, fiscal concerns and wide interest-rate gaps are overwhelming the usual demand for safety — while investors continue to chase gains in AI-linked stocks.

Frederic Neumann, chief Asia economist at HSBC, told CNBC underlying risk appetite remains healthy and global financial conditions highly accommodative.

U.S. markets, as well as some Asian ones, have been hitting record highs as investors pile into AI-related names such as Nvidia and Intel stateside, and Samsung Electronics, SK Hynix and Taiwan Semiconductor Manufacturing Company in Asia.

His view is supported by Henning Potstada, global head of multi asset at asset manager DWS. 

“The driver of equities is EPS growth, that’s the only driver that matters on the long run for equities, and EPS forecasts are going up,” Potstada told CNBC.

As for debt sustainability, despite strong investor confidence in Treasurys, the U.S. federal deficit has caused some worries. 

Last year, Goldman Sachs vice chairman Rob Kaplan said: “We’ve always talked about deficits, but we’re more highly leveraged on a net-debt basis than we’ve been in our lifetimes.”

At the time, Kaplan said that the country’s projected budget deficit of around $2 trillion, which is about 6-7% of GDP, is historically high outside of a recession.

However, actual numbers were lower. The U.S. is on track to run a federal budget deficit of roughly $1.9 trillion, or 5.8% of GDP, in the 2026 financial year according to the Congressional Budget Office.