Global Retreat From US Treasuries Deepens: What It Signals for Risk Assets
Major foreign holders, including Denmark and China, are significantly reducing US Treasury holdings, signaling eroding confidence in US fiscal health.Summary
Foreign countries are increasingly reducing their holdings of US Treasuries, with Denmark's exposure hitting a 14-year low and China's falling to a 17-year low, reflecting a broader erosion of confidence in US fiscal discipline. While US Treasury Secretary Scott Bessent dismissed Denmark's move as irrelevant, the persistent selling by major holders like China and India suggests a fundamental reassessment of US credit risk, despite increases by Japan and the UK. This sustained liquidation of Treasuries can trigger a liquidity cascade: rising yields increase borrowing costs, tighten financial conditions, and weaken collateral, potentially putting significant downward pressure on risk assets like equities and cryptocurrencies.
(Source：BeInCrypto)