Deep Dive: Foreign Holdings of U.S. Treasuries Climb

The video discusses the increase in foreign holdings of US Treasurys, highlighting that the usual suspects, China and Japan, were not the main drivers. Instead, countries like the Cayman Islands, Ireland, UK, and Luxembourg saw increased holdings, largely due to institutional investors. This trend could reverse quickly if these investors decide to sell. Despite a low yield of 1.7% on the 10-year Treasury, it remains attractive compared to other global investment options.

Which countries were initially thought to be the main contributors to the increase in US Treasury holdings?

• Russia and South Korea

• Brazil and India

• China and Japan

• Germany and France

Which countries are known for custodial holdings that contributed to the increase in US Treasury holdings?

• Brazil, Argentina, Chile, Peru

• Germany, France, Italy, Spain

• Russia, Ukraine, Poland, Hungary

• Cayman Islands, Ireland, UK, Luxembourg

What is the primary concern regarding the increase in Treasury holdings by institutional investors?

• They might demand higher interest rates

• They may influence US monetary policy

• They could lead to inflation

• They could quickly turn to net selling

What is the yield on the 10-year US Treasury mentioned in the video?

• 2.5%

• 1.7%

• 3.0%

• 1.2%

Why might the 1.7% yield on the 10-year Treasury still be considered attractive?

• It is guaranteed by the US government

• It is tax-free

• It is higher than most other global investment options

• It is expected to increase significantly