Foreign Purchasers Moving Away from US Outstanding Debt: Report
19 Nov 2023 22:18
Islam Times - The demand for US government outstanding debt from foreign buyers has considerably slashed with the share of Treasury bonds held by foreign private investors and central banks falling to around 30% from some 43% 10 years ago.
In the meantime, supply has become more and more inexhaustible, the Wall Street Journal reported, citing data from the Securities Industry and Financial Markets Association.
A net $2 trillion in new debt issued by the US Treasury this year marked an all-time high, excluding the pandemic-related borrowing spree scored back in 2020, RT reported.
Demand for the US obligations from foreign investors and central banks, voracious buyers of US debt in the 2000s and early 2010s, is expected to be “more limited,” according to the Treasury Borrowing Advisory Committee, a group of Wall Street executives that advise the US Treasury.
In response to sluggish demand, the US Treasury has recently shifted to issuing shorter-term bonds that are in higher demand, in an attempt to restore market stability. The yield on the US ten-year note that shot above 5% last month is now at around 4.4 percent.
Meanwhile, the statistics from the Council on Foreign Relations, which tracks the investments on a rolling 12-month basis, indicates that the pace of foreign buying has eased in recent months to around $300 billion, from levels above $400 billion for much of 2022, the report added.
Story Code: 1096877