EmbeddingGemma 2: an open, lightweight multimodal embedding model
deepmind.google·6d ago
AI Engineering
Hacker News·24d ago·5 min read
US Treasuries Have Become Unappetizing for Foreign Central Banks and Governments
TL;DR
Foreign central banks and governments are increasingly shunning US Treasury securities, with their holdings dropping to levels not seen since 2012. This shift indicates a reduced reliance on foreign financing for US deficits.
✦ Why It Matters
Consider diversifying investment strategies away from US Treasuries due to declining foreign interest.
Key Takeaways
- Monitor changes in foreign central bank Treasury holdings.
- Consider the implications of increased reliance on offshore financial centers.
- Assess the impact of currency interventions on Treasury markets.
- Stay informed about trends in private foreign holdings of Treasuries.
Full Summary
US Treasury securities have lost appeal for foreign central banks and governments, whose holdings fell to $3.77 trillion in July 2023, a level last seen in 2012. Despite the total amount of Treasury securities tripling since then, foreign official holdings have plummeted from 34% in 2012 to just 12.8% in July 2023.
This decline coincides with a significant increase in private foreign holdings, particularly from US hedge funds based in offshore financial centers like the Cayman Islands. Japan and China have notably reduced their Treasury holdings, with Japan selling $135 billion since February 2023 to stabilize its currency.
Meanwhile, opaque financial centers now hold a substantial portion of Treasuries, raising concerns about the stability of the market as these entities account for 35% of all foreign holdings.