China Cuts US Treasury Holdings to 18-Year Low Amid Iran Tensions and Fed Uncertainty
China's holdings of US Treasuries fell to US$633.4 billion in June, the lowest since September 2008, according to US Treasury Department data released Monday. The May figure was US$659.3 billion. Overall foreign holdings dropped to US$9.299 trillion from US$9.371 trillion. The reduction continues Beijing's diversification of reserves amid renewed US-Iran hostilities in June and uncertainty over Federal Reserve policy. New Fed Chairman Kevin Warsh's debut policy meeting featured a notably brief statement and no rate forecast, leaving investors with fewer clues. Treasury yields at the long end have climbed to multi-year highs over concerns about Washington's fiscal sustainability.
Key facts
- China cut US Treasury holdings to US$633.4 billion in June, a nearly 18-year low.
- Holdings in May stood at US$659.3 billion.
- The previous low was US$618.2 billion in September 2008, according to Wind.
- Overall foreign holdings of US Treasuries fell to US$9.299 trillion in June from US$9.371 trillion.
- US-Iran hostilities reignited in June before a tentative ceasefire.
- Kevin Warsh chaired his first Federal Reserve policy meeting in June.
- Warsh declined to publish a rate forecast, in line with his criticism of forward guidance.
- Long-term Treasury yields, especially 30-year and 10-year, have hit multi-year highs on fiscal sustainability concerns.
Entities
Artists
- Kevin Warsh
Institutions
- US Treasury Department
- Federal Reserve
- Wind
Locations
- China
- United States
- Iran
- Beijing
- Washington