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