More than 200 central banks and foreign entities hold Treasuries with the New York Federal Reserve, but their holdings have declined significantly, with a $17 billion drop last week. Triggers include concerns over President Trump's tariffs impacting bond markets. Analysts warn that a reduction in foreign investor appetite, which accounts for about 30% of the Treasury market, could lead to higher borrowing costs for the U.S. amid a fragile economic landscape and a depreciating dollar.
"The other big thing that we worry about is the fact that foreign private investors may not be adding to Treasury securities and may likely be stepping back from the market as well," said Meghan Swiber, a managing director and U.S. rates strategist at Bank of America.
"Foreign buyers account for roughly 30% of the U.S. Treasury market," according to Apollo chief economist Torsten Sløk. A note from BofA suggested demand from these investors is showing 'cracks.'
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