Foreign Holdings of U.S. Treasuries Hit Record $9.13 Trillion in June 2025

Foreign holdings of U.S. Treasuries have reached a record $9.13 trillion as of June 2025, surpassing the previous month’s total of $9.05 trillion and significantly exceeding the prior year’s figures [1]. The increase underscores continued global confidence in the U.S. debt market, with foreign investors now accounting for 32% of marketable U.S. Treasuries, or approximately $9 trillion [2]. The United Kingdom has overtaken China as the second-largest holder of U.S. debt, following Japan [1]. Meanwhile, Belgium and Saudi Arabia saw notable gains, with the latter boosting its holdings by $2.9 billion to $130.6 billion [3]. These trends reflect a sustained period of rising foreign demand, with holdings exceeding $9 trillion for four consecutive months [4].

Private foreign investors have emerged as the dominant force in this surge, with net purchases reaching $287.5 billion in May 2025 [1]. This was part of a broader $318.5 billion in net foreign inflows, including $31.1 billion from foreign official institutions [1]. The growing participation of private investors signals a shift in the structure of U.S. debt demand and highlights the perceived stability and liquidity of Treasuries [2].

Despite the rising national debt, which now exceeds $37 trillion, the appetite for U.S. debt remains strong. Analysts suggest that global investors continue to view U.S. Treasuries as a safe haven amid economic uncertainty [2]. This confidence supports the liquidity of the U.S. dollar and indirectly influences global asset markets [1]. However, the reliance on foreign buyers raises concerns about external pressures on U.S. fiscal policy, particularly in periods of geopolitical tension [2].

Policymakers are closely examining ways to reduce borrowing costs and manage the growing debt load. Some propose shifting toward short-term debt issuance to help lower yields [5]. There is also ongoing discussion about potential coordination between the Treasury Department and the Federal Reserve, though Fed Chair Jerome Powell has emphasized that monetary policy will remain focused on price stability and employment, not fiscal considerations [5].

While the surge in foreign holdings reinforces the central role of the U.S. debt market in global finance, it also brings scrutiny over long-term fiscal sustainability. The evolving dynamics of foreign demand continue to shape global capital flows, interest rates, and economic stability [1][2][3].

Source:

[1] https://www.reuters.com/business/foreign-holdings-us-treasuries-climb-record-913-trillion-june-2025-08-15/

[2] https://www.ainvest.com/news/record-foreign-demand-treasuries-implications-global-capital-flows-2508/

[3] https://www.arabnews.com/node/2612093/business-economy

[4] https://www.bloomberg.com/news/articles/2025-08-15/foreign-holdings-of-treasuries-climbed-to-a-record-high-in-june

[5] https://www.politico.com/newsletters/morning-money-capital-risk/2025/08/15/investors-dont-know-whats-coming-for-the-treasury-market-00510802

[6] https://www.axa-im.com/investment-institute/market-views/market-updates/fantasia