BRICS founding members China and Brazil, as well as newcomer Saudi Arabia, have been quietly unwinding their holdings of US debt.
New numbers from the US Treasury show China’s ownership of Treasury securities Dropped From $835.4 billion at the beginning of July to $821.8 billion at the end of July, a decrease of $13.6 billion.
Meanwhile, fellow BRICS member Brazil reduced its Treasury holdings by $2.7 billion during the same period, from $227.4 billion to $224.7 billion.
And Saudi Arabia reduced its holdings from $108.1 billion to $109.2 billion, a reduction of $1.1 billion.
Moreover, India, a founding member of BRICS, saw its treasury decline from $235.4 billion in June to $233.1 billion in July.
The United Arab Emirates, another incoming BRICS member, reduced its national debt holdings by $300 million, from $65.2 billion in June to $64.9 billion in July.
Adam Kobeissi, founder and editor-in-chief of The Kobeissi Letter. To tell It is now impossible to ignore this decline.
“Since its peak about a decade ago, China has unloaded nearly $500 billion in U.S. debt. Why is China selling U.S. debt so aggressively?
One answer is a potential slowdown in the economy. The other is that this may be part of a broader strategic shift. Either way, this is a trend that cannot be ignored. ”
A decline in bond markets and a rapid rise in U.S. Treasury yields have caused financial turmoil in recent days and weeks.
Friday was better than expected job report Adding fuel to the fire, the 10-year yield hit a high of 4.85% and the 30-year yield exceeded 5%.
According to CME’s FedWatch tracker72.9% of investors think the Fed will keep interest rates unchanged next month, and 27.1% think the Fed will raise rates by another 25 basis points.
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