In the past two years, the mainland has continued to accelerate the reduction of its holdings of U.S. bonds, but in fact, the Federal Reserve itself has sold more than $1.3 trillion of U.S. Treasury bonds in the past year and a half, which is more than the cumulative number of U.S. bonds sold by China, Japan, and the United Kingdom in the past year.
01 China accelerated its reduction of its holdings of U.S. bonds
Since 2023, China has reduced its holdings of U.S. bonds for 6 consecutive months, and the selling is very strong, if calculated from last year, the mainland has sold more than 250 billion US dollars, and if the time is pushed back 10 years, the mainland has sold more than 500 billion US bonds, throwing away 40% of the US bond holdings. At present, the mainland only holds $778.1 billion in U.S. bonds.
Of course, not only our country, in recent years, with the increasing risk of the US debt crisis, many countries around the world have successively reduced the scale of their holdings of US debt.
For example, Japan also reduced its holdings by $28.5 billion during this period, and now its holdings of U.S. bonds have fallen to $1.087 trillion, although Japan has also increased its holdings of U.S. bonds this year, but most of the time it has been reduced, and since last year, Japan has sold a total of $190 billion.
Moreover, it is worth noting that in September last year, there was even a scene of China, Japan and Britain selling US bonds together, with the three countries selling US bonds exceeding $20 billion, the UK selling nearly $30 billion in a single month, and the total amount of US bonds held by overseas investors in that month decreased by $101.6 billion.
02 The Federal Reserve dumped 1.3 trillion
Almost the world is selling US bonds, and what is more noteworthy is that even the Federal Reserve itself is increasing its selling.
The data shows that from June 2022 to January 2023, the Fed reduced $374 billion in U.S. Treasuries, plus the reduction of U.S. bonds throughout 2023, the Fed itself has sold more than $1.3 trillion in U.S. Treasuries in the past year and a half.
However, as the scale of US bond sell-offs has risen, the total size of US bonds has also shown a trend year on year.
For example, in February 2022, the total U.S. debt exceeded $30 trillion. In June 2023, it exceeded $32 trillion, in September 2023, the total U.S. debt reached the $33 trillion mark, and in January 2024, it exceeded $34 trillion, an average increase of $1 trillion every three months.
You know, before that, the U.S. debt ceiling was $31.4 trillion, and U.S. Treasury Secretary Yellen warned about the U.S. debt crisis many times, but over the years, the ceiling has been continuously raised. In the face of the precarious U.S. debt crisis, which has triggered a wave of reductions in many countries around the world, it is not difficult to find that everyone is worried about the ability of the United States to repay its debts.
So the world has reduced its holdings of U.S. bonds in large quantities, and who bought the U.S. bonds that have been reduced?
03 Who is the "pick-up man" of this round of U.S. bond sell-off?
Since China, Japan, and the United Kingdom are all selling off a large number of U.S. bonds, including the Federal Reserve, which is also selling U.S. bonds on a large scale, who took over these U.S. bonds and became the "pick-up man" of U.S. Treasury bonds?
According to the data, in this round of world sell-off of U.S. bonds, private investors in the United States increased their holdings of U.S. bonds by $1.7 trillion, and U.S. pension funds increased by nearly $300 billion, in addition, U.S. local governments also increased their holdings of U.S. bonds by more than $200 billion.
In other words, the United States itself has increased its holdings of U.S. bonds by a total of $2.2 trillion. Become the biggest "pick-up man" of U.S. bonds!
Among them, the receivers include not only American individuals and family investors, but also American institutional investors.
The reason why ordinary American households buy a large number of U.S. bonds is mainly because they can obtain a higher "risk-free return" by buying U.S. bonds.
You know, in previous years, the interest rate on U.S. bonds was almost zero, but now it can reach more than 4%. Obviously, U.S. bonds are very attractive to them.
Write at the end. In this round of U.S. bond reduction, it is obvious that while the world is accelerating the reduction of U.S. bonds, the Federal Reserve is selling 1.3 trillion.
The reason for the global sell-off in US bonds is the fear of a default on US debt, and the purpose of the Fed's massive reduction of US bonds is only to reduce its balance sheet and recycle dollar liquidity in the financial markets, so as to achieve the purpose of reducing inflation.
But no matter who sells U.S. bonds, someone will eventually untie the market, and this "taker" is ordinary family and institutional investors in the United States, which now accounts for as much as 70%.
After all, the interest rate used to be almost zero, and now the yield is as high as 5.5%, and it is normal for this kind of "risk-free return" to be robbed by them.
Wan Ziwen said: Every word of the article was typed out by me, and I clicked "watching" to let me know that you are also "doing your best" for life.