Foreign Official Institutions' Holdings of U.S. Treasuries Decrease to 12.15%

The share of U.S. Treasury holdings by foreign official institutions, including central banks, treasuries, and sovereign wealth funds, has decreased from 40.69% in June 2008 to 12.15% in June 2026. This decline is attributed to the increasing U.S. government debt, which has shifted the investor base in the Treasury market towards hedge funds and private traders. According to the Federal Reserve Bank of St. Louis (FRED), the amount of U.S. short- and long-term Treasury securities held by foreign official institutions was $3.778118 trillion (approximately 5,271 trillion won) in June 2026. The holdings fluctuated below $4 trillion (approximately 5,580 trillion won), but the share has decreased as the total U.S. government debt has risen more rapidly. Foreign official institutions are classified as investors less sensitive to past prices, prioritizing safety and dollar liquidity. Changes became evident after China began selling U.S. Treasuries in 2016, and the reduction in share accelerated during the COVID-19 pandemic due to cash preservation. The judgment on dollar-denominated assets has also been influenced since Russia's invasion of Ukraine. U.S. Treasuries serve as a benchmark interest rate in the global financial market, while hedge funds and private investors are more sensitive to price and yield. Recently, the U.S. Treasury announced plans to expand Treasury buybacks in response to selling pressure on long-term Treasuries.

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