In August, the central banks of Japan, China and Taiwan sold U.S. Treasuries at the fastest rate in as many as seven years. Taiwan cut nearly 9% of its Treasury holdings, its biggest sell-off since 2000. China shed more than 2%, their biggest move since 2002. And Japan dumped 4% of their U.S. Treasures… their largest reduction since 2002.
In all, Asian banks dumped about $52 billion in U.S. Treasures in the final weeks of summer. Not a gigantic sum, considering they own about $1 trillion more, but indicative of a trend.
Globally, central banks dumped about $163 billion in U.S. Treasuries. Not since Russia’s 1998 default have U.S. Treasures been sold at such a pace. And these numbers are from August -- before the Fed cut the overnight rate by 50 points. We won’t be surprised if next month’s TIC looks as frightening, or worse.
In all, Asian banks dumped about $52 billion in U.S. Treasures in the final weeks of summer. Not a gigantic sum, considering they own about $1 trillion more, but indicative of a trend.
Globally, central banks dumped about $163 billion in U.S. Treasuries. Not since Russia’s 1998 default have U.S. Treasures been sold at such a pace. And these numbers are from August -- before the Fed cut the overnight rate by 50 points. We won’t be surprised if next month’s TIC looks as frightening, or worse.
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