Falling Treasuries: A Currency Perspective

What are the implications for the U.S. dollar and investors’ portfolios if bond prices continue to fall, as they have of late? Within that context, should investors care whether the U.S. retains its status as a “reserve currency”? Should it effect the way investors think about their own cash reserves? Until the end of last year, China had been a net seller of U.S. Treasuries for six consecutive months, spooking some investors that China might start to diversify its reserves in earnest. That trend was reversed in January, when its Treasury holdings grew by 0.7% in one month to $1.159 trillion; year-on-year, China’s holdings increased a mere $4.8 billion. China’s year-on-year increase in Treasury holdings is sufficient to . . . → Read More: Falling Treasuries: A Currency Perspective