China Weighs Slowing or Halting Purchases of U.S. Treasuries
Source: Bloomberg
China added to bond investors jitters on Wednesday as traders braced for what they feared could be the end of a three-decade bull market.
Senior government officials in Beijing reviewing the nations foreign-exchange holdings have recommended slowing or halting purchases of U.S. Treasuries, according to people familiar with the matter. The news comes as global debt markets were already selling off amid signs that central banks are starting to step back after years of bond-buying stimulus. Yields on 10-year Treasuries rose for a fifth day, touching the highest since March.
China holds the worlds largest foreign-exchange reserves, at $3.1 trillion, and regularly assesses its strategy for investing them. It isnt clear whether the officials recommendations have been adopted. The market for U.S. government bonds is becoming less attractive relative to other assets, and trade tensions with the U.S. may provide a reason to slow or stop buying American debt, the thinking of these officials goes, according to the people, who asked not to be named as they arent allowed to discuss the matter publicly. Chinas State Administration of Foreign Exchange didnt immediately reply to a fax seeking comment on the matter.
...snip...
Any reduction in Chinese purchases would come just as the U.S. prepares to boost its supply of debt. The Treasury Department said in its most recent quarterly refunding announcement in November that borrowing needs will increase as the Federal Reserve reduces its balance sheet and as fiscal deficits look set to widen.
Read more: https://www.bloomberg.com/news/articles/2018-01-10/china-officials-are-said-to-view-treasuries-as-less-attractive
Ztolkins
(429 posts)This the next superpower?
IronLionZion
(45,411 posts)the Chinese government has been investing in high tech and large IT modernization projects. The US government lags behind in some areas. China and Russia have strong cyber attack capabilities.
AtheistCrusader
(33,982 posts)part of me is like 'cool' because hey, humanity. Part of me is like 'oh shit' because we've been so used to the perception of tech dominance for so long...
But it's just perception.
bronxiteforever
(9,287 posts)This is a big deal. Another thing the rethugs hid from discussion when passing the save the 1% bill.
Smart move by China.
Whats Fredos move now?
exboyfil
(17,862 posts)bronxiteforever
(9,287 posts)RKP5637
(67,102 posts)Historic NY
(37,449 posts)sign of things to come.
Javaman
(62,510 posts)IronLionZion
(45,411 posts)Yeah, great timing Republicans. Tax cuts are the solution to every problem. Next they'll suggest some really draconian cuts to social programs and benefits to compensate.
And then what? Even the investor class elderly are heavily invested in bonds for retirement income.
Looks like fewer people are viewing the US as a good investment.
wolfie001
(2,225 posts)Very soon! Inflation winds coming?
lark
(23,083 posts)If our finances are bad because of China, drumpf gets a pass, and it will be easier to do what the fascist/oligarchs have long dreamed of, destroying Social Security, Medicare and Medicaid and taking all workers $ to keep ever expanding military advertensurism going and have the largest transfer of wealth ever! Of course it will be "how sad this is needed", "China destroyed us economically and we have to make up the difference to the treasury". Not one word of reversing the huge tax give-away will be heard from repugs, just killing the middle and poor classes.
vkkv
(3,384 posts)Petro-Yuan.. Petro-Euro.. Petro-Ruble..