China and the Federal Reserve were two of the largest buyers of Treasury bonds since 2010. Now both China and the Fed are selling Treasuries: in China's case to reduce their risk of US dollar holdings, and in the Fed's, to rein in runaway inflation that resulted from decades of Fed policy error.
Japan is the largest foreign holder of US government debt. However Japan now runs chronic trade deficits, instead of surpluses, and have also scaled back their Treasury holdings.
The US government will be rolling over $8 trillion in maturing paper in 2024, and will need to finance an additional $3 trillion in new deficit spending. Almost all this new issuance will be absorbed by US investors, who will demand far higher yields to compensate for higher inflation and opportunity cost.
Resources and links:
Foreign holders of US Treasury Bonds, December 2023
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AP, Japan records a trade deficit for the third straight fiscal year despite recovering exports
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Japan exports grow less than expected in April, trade balance shrinks
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Wolf Street, Fed balance sheet lowest since December 2020
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China's $53.3B Divestment in US Treasuries Signals Massive Shift From Dollar Assets
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China Sells Record Sum of US Debt Amid Signs of Diversification
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The Japanese Bid for Foreign Bonds After the End of Yield Curve Control
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America’s Debt “Death Spiral” Gives US $1 Trillion Reasons To Act Now
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