BRICS Nations Slash US Debt Purchases—Foreign Demand for Treasuries Plummets 19%

Washington’s IOU pile just got lonelier. BRICS countries—the economic bloc breathing down the dollar’s neck—are snapping up fewer Treasury bonds. A 19% nosedive in foreign demand screams de-dollarization louder than any summit declaration.

Wall Street’s favorite ‘risk-free’ asset? Not so risk-free when your biggest customers start ghosting. Maybe they’d prefer bonds backed by something shinier… say, gold? Or Bitcoin?

Funny how ‘exorbitant privilege’ works—until it doesn’t.

BRICS: Foreign Countries Buying US Bonds & Treasuries Drop By 19%

The drop in US bonds and Treasuries is concerning as it’s the first major decline in over three years. In addition, Dealogic data shows that sovereign government bonds from developing countries have seen a surge, especially in local currencies. Investments in local currency-based assets soared to a record high of $326 billion in five months this year. It recorded a five-year high indicating that BRICS members are succeeding in shaking the US bonds and Treasury markets.

The drop in US dollar-based financial assets comes after other countries are looking at local currency issuance. European nations, Asian countries, and the BRICS alliance are pulling back from US-based bonds and Treasuries. Tariffs and trade wars are partly responsible for the drop as other countries want to reduce America’s grip on the global economy. Even Europe, which is America’s close ally is drifting away from the WHITE House’s policies.

The US is damaging its financial prospects and BRICS is playing along with the policies by ignoring bonds and Treasuries. Local currencies are leveraging the developmental shift and taking its shot which came after decades of struggle.said Johnny Chen, Portfolio Manager at William Blair.