Foreign appetite for US debt is cooling fast.
June saw foreign Treasury holdings drop $72B to $9.30T — lowest since January. That's 3 declines in 4 months, totaling $190B out the door.
The big three all trimmed:
Japan cut $26B to $1.12T (lowest since Jan)
UK reduced $9B to $940B (2nd-largest cut ever)
China slashed $26B to $633B (lowest since Sept 2008)
Central banks and official holders pulled $70B in June alone, down to $3.78T — the weakest since Feb 2024.
This isn't panic selling, but it's a clear shift. Foreign buyers have been the backbone of US debt markets for decades. When they step back, yields rise, borrowing costs climb, and the dollar feels pressure.
With US deficits still running hot and issuance staying heavy, the question becomes: who fills the gap? Domestic buyers? The Fed? Or does the market simply demand higher rates to compensate?
Keep an eye on the 10-year yield and currency moves. This trend matters more than most headlines suggest.
June saw foreign Treasury holdings drop $72B to $9.30T — lowest since January. That's 3 declines in 4 months, totaling $190B out the door.
The big three all trimmed:
Japan cut $26B to $1.12T (lowest since Jan)
UK reduced $9B to $940B (2nd-largest cut ever)
China slashed $26B to $633B (lowest since Sept 2008)
Central banks and official holders pulled $70B in June alone, down to $3.78T — the weakest since Feb 2024.
This isn't panic selling, but it's a clear shift. Foreign buyers have been the backbone of US debt markets for decades. When they step back, yields rise, borrowing costs climb, and the dollar feels pressure.
With US deficits still running hot and issuance staying heavy, the question becomes: who fills the gap? Domestic buyers? The Fed? Or does the market simply demand higher rates to compensate?
Keep an eye on the 10-year yield and currency moves. This trend matters more than most headlines suggest.
