CNBC – June 18, 2018: The article highlights that the country of Russia has cut Treasury holdings in half and that foreigners are losing appetite for US debt. And that foreign governments have pared back their holdings of U.S. debt, reducing the total by nearly $10 billion in March and April (2018). Russia was notable among the group stepping back with a nearly 50 percent cut. The U.S. government needs buyers of its debt as the Fed continues to reduce its holdings and the budget deficit is projected to surge in coming years.
“We need all the help we can get in the search for buyers of US Treasuries due to the enormous supply coming our way in the next few years,” Peter Boockvar, chief investment officer at Bleakley Advisory Group, said in a note. “Our stance on trade with our trading partners could very well play into this in coming months and quarters, especially with China, the largest owner of US Treasuries.”
President Donald Trump’s administration has been in a tit-for-tat battle of tariff threats with multiple U.S. trading partners, particularly China.