"If there's one thing that catches the attention of the second Trump administration, it's how foreign investors behave toward U.S. assets. Perhaps most notably, it's their attitude toward the safe-haven of U.S. Treasuries. Last month, Deutsche Bank earned the ire of Treasury Secretary Scott Bessent after one of its analysts suggested foreign investors may leverage their holdings of U.S. borrowing and equities against the White House's threats over the sovereignty of Greenland."
"Minding the Bloomberg report, UBS's Paul Donovan noted this morning that it is nevertheless of note that foreign investors are being advised to rethink their strategy. He said the report "does not include the official holdings, and China's banks are not major players in the U.S. Treasury market. Nonetheless, the idea that international investors may be less inclined to buy U.S. Treasuries in the future (without dumping existing holdings) is getting attention in markets." ( China is the third-largest holder of U.S. Treasuries.)"
The Trump administration closely monitors foreign investor behavior toward U.S. assets, especially U.S. Treasuries. Deutsche Bank drew criticism after an analyst suggested foreign investors might leverage holdings of U.S. debt and equities in response to U.S. threats over Greenland, and Treasury Secretary Scott Bessent dismissed Denmark's holdings as "irrelevance" while markets reacted. Chinese regulators advised banks to limit large holdings of U.S. government debt over volatility and security concerns. Guidance against heavy Treasury ownership, even if not official holdings, raises market attention about reduced foreign appetite. Mainland China and Hong Kong held $938 billion of U.S. Treasuries, feeding dollar diversification concerns.
Read at Fortune
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