U.S. International Investment Position O

U.S. International Investment Position Overview: Q2 2025

The U.S. Bureau of Economic Analysis (BEA) recently released the U.S. International Investment Position (IIP) data for the second quarter of 2025, which shows that as of the end of Q2 2025, the U.S. net international investment position— the difference between U.S. residents' foreign financial assets and liabilities— stood at -$26.14 trillion, a deterioration from the revised Q1 2025 figure of -$24.65 trillion, with total U.S. foreign assets rising to $39.56 trillion (up from Q1's revised $36.89 trillion) and total U.S. foreign liabilities climbing to $65.71 trillion (up from Q1's revised $61.54 trillion); the $1.49 trillion decline in the net IIP from Q1 to Q2 stems from two main factors, namely a $428.1 billion deficit in net financial transactions (reflecting more outflows than inflows in cross-border financial activities) and a $1.06 trillion deficit in net other position changes driven by price and exchange rate fluctuations— among which price effects caused a $2.23 trillion deficit as U.S. stock prices rose faster than foreign stock prices (pushing up the market value of U.S. liabilities more than its assets) while exchange rate effects brought a $1.17 trillion surplus as foreign currencies appreciated against the U.S. dollar (boosting the dollar-denominated value of U.S. foreign assets more than its liabilities). 

The $2.68 trillion increase in U.S. foreign assets was fueled by $1.29 trillion in exchange rate gains (from stronger foreign currencies relative to the U.S. dollar) and $1.04 trillion in price gains (driven by rising foreign stock prices), with all major asset categories growing and portfolio investment (e.g., foreign stocks and bonds) and direct investment (e.g., U.S. companies' overseas subsidiaries) leading the way; meanwhile, the $4.16 trillion jump in U.S. foreign liabilities had three key drivers, including U.S. stock price gains that pushed portfolio investment liabilities up by $1.74 trillion and direct investment liabilities up by $1.51 trillion, as well as $657.2 billion in net financial inflows (mostly from foreign purchases of U.S. equities and long-term debt securities), and like assets, all major liability categories expanded with portfolio and direct investment liabilities as the top contributors. Additionally, starting in March 2026, the BEA will make two important adjustments to its data release: first, merging the U.S. international transactions (balance of payments) and international investment position reports into one combined quarterly release (to provide a more holistic view of U.S. global economic engagement and speed up access to IIP stats by replacing two separate, staggered releases), and second, moving tables previously included in the body of news releases to its Interactive Data Application (allowing users to access full time series, customize views, and download data in PDF, Excel, or CSV formats, which reduces duplication and directs users to more flexible tools).