Including foreign investors. When investors lose their appetite for this debt, yields would rise until they’re high enough to attract new investors. Higher yields mean higher borrowing costs and even bigger deficits for the US government. All eyes have been on foreign investors to see if they start losing their appetite. And some have – especially China and Hong Kong – but others have piled into it.
All foreign investors combined piled on another $198 billion of Treasury securities in February, and $587 billion over the past 12 months, bringing their total holdings to a record $9.49 trillion, according to Treasury Department data today (red line in the chart below).
Of that $9.49 trillion, $7.76 trillion (84%) were long-term Treasury securities (blue), and the rest were short-term Treasury bills.