Markets Say U.S. Doesn’t Need China—or Fed—to Buy Its Debt
- Yields have plunged as China, U.S. central banks trim holdings
- Foreigners have been bit-part players, but demand held up
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A specter is supposedly haunting U.S. bond markets: The prospect that China, which holds $1.11 trillion of Treasuries, could weaponize them in its trade war with President Donald Trump.
With U.S. 10-year yields plunging toward 2%, the day after the Treasury said Chinese holdings shrank to a two-year low, the phantom is looking a bit faint -- and a closer look at the data may help to dispel it altogether.