Buyer of last resort

At a time where the US needs a buyer of last resort for its Treasury bonds, the two biggest foreign owners of US government debt are selling. #china treasury holdings have been reduced by $400Bn since the recent peak of 2013. #japanhas made similar reductions but in the last 2 years, probably linked to their #yieldcurve control program and the need to defend the Yen after printing massive amounts of currency to buy Japanese bonds. These actions put more pressure on the fed at a time of balance sheet reduction, and hiking rates. It also puts more pressure on the US Treasury, since new issuance will be done at higher interests, affecting the budget deficit. Globalization may be reversing in terms of trade, but not in terms of the global macro picture.

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