1.Who Is Going to Buy $1.3 Trillion in New U.S. Government Debt?
Asian investors are proving less and less eager to buy U.S. government bonds, even as the Treasury Department prepares to sell $1.3 trillion of new debt in the new fiscal year.
Foreigners increased their holdings of Treasurys by $78 billion in the first eight months of this calendar year, according to the Treasury. That is just over half of what they bought in the same period last year.
Holdings have particularly stagnated in a number of emerging Asian economies—including South Korea, Singapore, Thailand and Taiwan—which have prized U.S. government debt as a capital bulwark since the 1997 Asian currency crisis.
Many observers assume the U.S. has no trouble finding demand for its debt in the vast pool of world-wide governments, financial institutions, mutual funds and individual investors who want to own the world’s major risk-free asset. Yet the Treasury is finding fewer buyers in some parts of the world, leaving domestic investors such as mutual funds to pick up the slack.
Where to Find Treasury Buyers? Not Asia
The erosion of demand in emerging Asian markets reflects their maturation into more stable economies
https://www.wsj.com/articles/where-to-find-treasury-buyers-not-asia-1541422801?reflink=e2twmkts.\