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Foreign holdings of U.S. Treasuries hit a new all-time high in August, according to data from the Treasury Department. This marked the fourth consecutive month of increases. Foreign investors held $8.503 trillion in U.S. Treasuries in August, up from $8.338 trillion the previous month, representing an 11.5% increase from a year earlier.
During August, U.S. Treasury yields decreased from 3.978% to 3.844%, as the Federal Reserve signaled the beginning of an easing cycle to reach its 2% Inflation target. The Fed went on to cut rates by 50 basis points on September 18.
Japan maintained its position as the largest non-U.S. holder of Treasuries, with holdings totaling $1.129 trillion in August. On the other hand, China’s holdings decreased for the second consecutive month to $774.6 billion.
In terms of U.S. asset classes, foreign inflows were seen across the board in August. U.S. Treasuries saw inflows of $19.2 billion, while U.S. equities attracted $64.8 billion in foreign buying.
Overall, net foreign acquisitions of long- and short-term securities, including banking flows, resulted in a net inflow of $79.2 billion in August. On the other side, U.S. residents increased their holdings of long-term foreign securities by $18.4 billion during the month.
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Emma Collins, graduated in Financial Economics from the University of Chicago in the USA in 2016. She has since worked at an asset management firm in New York, where she specializes in investment strategies and portfolio management. Emma has a keen interest in financial analysis and has published several articles in renowned financial journals. Her work focuses on providing actionable insights to investors, and she is known for her forward-thinking approach to managing financial portfolios.
