Global bond flows are sending mixed signals. Overseas holdings of U.S. Treasuries have hit a record high, with countries like Japan, the UK, Norway, and Saudi Arabia increasing exposure. In contrast, China continues to cut holdings, dropping to its lowest level since 2008 as it diversifies reserves and boosts gold accumulation. This appears to be a strategic shift, not market stress. Meanwhile, political pressure eased as Trump softened his stance on Fed Chair Powell, reflecting limited room to interfere with central bank independence amid still elevated inflation.
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