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Global Investors Retreat from U.S. Treasury Market Amid Dollar and Trade Risks

Global Investors Retreat from U.S. Treasury Market Amid Dollar and Trade Risks

Published:
2025-06-04 15:25:01
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Foreign investors are growing wary of U.S. government debt as hedging costs rise and the dollar's weakness looms. Jon Sindreu of the Wall Street Journal notes that higher long-term rates have erased the premium once associated with Treasuries, pushing capital toward local bonds. The Federal Reserve's reluctance to cut rates exacerbates the trend.

March data showed a surge in foreign Treasury holdings, yet parallel sell-offs in German, British, and Japanese bonds suggest a broader recalibration. Trade tensions and fiscal uncertainty further dampen appetite for dollar-denominated assets. Market reactions to tariffs and tax policies have repeatedly correlated with dollar declines.

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