Key Data Tracks Foreign Investments in U.S. Assets

The report itself is complex, so investors may want to focus on a few key items in each month's press release.

• Net flows. These provide insight into near-term interest in U.S. investments. "It's important to look at all flows (meaning all investments, including stocks and bonds), but flows into Treasuries are very important to gauge the interest (or lack thereof) in our debt," Martin said.
  • Foreign official flows generally include foreign central banks. "I consider these buyers to be price insensitive," Martin said. "They hold or want to hold Treasuries for reasons other than the yields they offer, such as safety, liquidity, or just the need to hold dollars given their reserve currency status."
  • Foreign private flows typically reflect investors who are price sensitive. Yield matters. "If foreign private investors see better value elsewhere, they may be faster to exit dollars or Treasuries and shift overseas or back to their home country," Martin added.
• Total holdings. The sum of flows over time, but it's important to look at trends. Are total holdings rising, falling, or holding steady? When looking at total holdings, price changes matter. An increase in total holdings doesn't necessarily mean inflows; it could mean price appreciation and vice versa.

This chart shows the net flows of foreign capital into U.S. Treasuries month by month in billions of dollars over the last five years, divided between private investments and official government investments.

Annual country data also allows U.S. investors to track which countries are the largest holders of U.S. Treasury securities and how their holdings change over time. This Treasury-specific data is arguably the most important part of the TIC report because it can sometimes indicate changes in the overseas economic climate as well as geopolitical shifts.

For instance, Japan and the United Kingdom increased their U.S. Treasury holdings by 11.7% and 19.4%, respectively, over the course of 2025. China, the third-largest holder, reduced its holdings by 9.8% over that same period.

Any sign of China, Japan, or other large economies dialing back on U.S. Treasuries isn't necessarily evidence that foreign investors are losing faith in the United States as a destination for capital. Growing economies elsewhere or rising yields in other markets might simply keep more money at home.

"This is a risk in and of itself, especially for foreign private investors," Martin noted. "If there are more attractive alternatives, they can take demand away from the United States."

The amount of long-term Treasuries held by foreign official investors has generally stayed in a tight range for years. Since 2013, their holdings have stayed at roughly $4 trillion, although the actual amount has varied between $3.6 trillion and $4.3 trillion. While those holdings have remained steady, they have not kept pace with the growth in U.S. Treasuries outstanding. Foreign official investors have generally not been buying enough to maintain their previous share of the market.

Conversely, foreign private investors have been consistently growing their holdings, which have risen from $1 trillion in 2010 to $5.5 trillion in May 2026.

The drop in Chinese holdings during 2025 may have reflected declining relations as tensions intensified over China's access to U.S. semiconductors and President Trump's implementation of steep tariffs against China that spring.

However, China has been shedding Treasury holdings for years, so tariffs alone were unlikely to be the sole culprit. The country held nearly $1.3 trillion in 2015; that's now fallen to $659 billion. The decline accelerated in 2022.

That said, China may have less direct ways of getting exposure to U.S. Treasuries. "It's possible that China is buying or holding through Belgium," Martin said. "Holdings through Belgium have risen from $100 billion in 2016 to $472 billion currently."

The share of U.S. dollar reserves has been declining as well, suggesting foreign governments are looking for alternatives. The dollar's share dropped from 65% in 2005 to 57% in the third quarter of 2025. "That is a slow-moving train," Martin observed.

Inflows and outflows in the reports are broken down by official government purchases and private individual purchases, which sometimes head in different directions in a given month or year. For instance, private overseas investors were net buyers of U.S. Treasuries in four of the first five months of 2026, while official institutions posted net outflows in two of the five months.

Looking back further, over the 12 months from June 2025 through May 2026, private foreign buyers were net buyers of U.S. Treasuries in nine of those months, while official institutions net-sold in seven, possibly reflecting government concerns about U.S. asset values and some tariff-related tensions of the time.

The risks to private flows became evident earlier this year when Denmark's AkademikerPension announced plans to sell its $100 million in U.S. government bonds, citing concerns about U.S. government finances. This decision came amid separate tensions over tariff policy and U.S. pressures over Greenland, an autonomous territory of the Kingdom of Denmark.

Despite China's slow decline in holdings and the pension headlines, debasement fears eased by mid-2026. That could partly reflect recent Supreme Court legal setbacks for some tariffs, as well as expectations of a more hawkish Federal Reserve. If the Fed were to signal a more aggressive stance against inflation via a rate hike, it could support the dollar and temper debasement concerns, though the impact on Treasury yields would depend on demand, growth expectations, and other factors.

The dollar's strength and gold's weakness by mid-2026 could indicate less concern about debasement and, in turn, help keep money flowing into U.S. Treasuries. This is key because the United States is trying to finance its growing debt burden with regular auctions of Treasury securities. Any lack of interest in these auctions would likely send yields higher as the market adjusts to attract demand, raising borrowing costs across the economy and likely weighing on major U.S. indexes.

"Inflation and ongoing fiscal deficits could result in debasement risk rising," Martin said. "A lack of Fed independence can trigger it as well. It's bad because it can pull up our yields as demand weakens, and dollar declines can make it more expensive for us to import goods."