27 countries continued to sell, why is the US debt not fragrant?

Zhongxin Jingwei, June 17th (Song Yafen) accompanied by the continuous interest rate hike of the Fed, US Treasury (hereinafter referred to as U.S. debt) also ushered in the wave of selling. Following the 12 -year low held in China in March, it continued to break this record in April, and has reduced its holdings for 5 consecutive months. At the same time, more than 20 countries have also reduced U.S. debt.

According to data released by the US Ministry of Finance on June 15, US $ 1.152 billion in foreign net outflows appeared in April to US $ 7455 trillion, a new low since April 2021. Among them, China sold a total of US $ 36.2 billion in US debt in April, and currently holds $ 1003 billion. Japan has also reduced its holdings of US $ 13.9 billion in US debt, and the US debt held to US $ 1.218 trillion was the lowest level since January 2020. In addition to China and Japan, at least 25 countries have sold US debt to varying degrees in April.

Jia Jinjing, a senior researcher at Renmin University of China Chongyang Financial Research Institute, told the Sino -Singapore Jingwei Research Institute: "The Fed's interest rate hike represents the upward risk interest rate of the United States, and the risk of bonds will rise. Therefore, on the surface, on the surface, Reduting US debt itself is just a normal market operation. "

Cai Hao, a senior researcher at the China Chief Economist Forum, also believes that the continuous selling of US debt in various countries is a manifestation of the laws of the financial market. With the repeated expectations of US inflation, the Fed's determination to fight inflation is increasing, and even at the expense of sacrificing economic growth, it effectively imitates the tendency of Royo Walker, the Federal Reserve Chairman of the early 1980s. In this context, the market's rhythm and expectations of the Fed's interest rate hike continued to increase, which led to the rapid rise in the United States' risk -free interest rates. In order to reduce the rapid impairment caused by rising interest rates held by the U.S. debt, the central banks of the central banks of various countries have also become a rational choice.

In the long run, Jia Jinjing believes that behind the reduction of U.S. bonds from various countries, it also shows that investors lack confidence in US debt, indicating that the fundamentals of the US economy are very bad. In addition to high inflation, the United States is also facing crisis such as supply chain.

According to data released by the US Department of Labor, the consumer price index (CPI) of the United States residents in May reached 8.6%, which has reached a new high in 40 years since March. Recently, U.S. stocks have also continued to decline, and it has not begun to rebound until June 15th.

It is foreseeable that due to the stubborn existence of high inflation, the United States will still raise interest rates during the United States. Even the Federal Reserve President Powell admits that the probability of the next meeting will still raise interest rates 50 base points or 75 base points. In the future, the impact of U.S. stock markets and bond markets will continue.

Jia Jinjing emphasized that if the Fed does not raise interest rates, inflation cannot be controlled, and interest rate hikes will definitely damage the liquidity of the US dollar and then damage the US dollar credit. U.S. debt credit itself is suffering, and it is a accelerated depreciation asset. If you do n’t throw now, you should be a “receiver.” The asset valuation of the US dollar is now reset, including US bonds and stocks.

With the continuous selling of US debt in various countries, is there a risk of collapse in US debt? Cai Hao believes that there is basically no such risk. "The selling of US debt on US debt will exacerbate the turmoil of the US bond market and quickly push up the US risk -free interest rate. However, because U.S. debt is a globalized security asset, there will be no risk of collapse."

Cai Hao emphasized that it is necessary to pay attention to the rapid rise in the risk -free interest rate representing the US debt, which will cause the spread of the United States and other countries (mainly developing countries) to quickly approach or even invert, which may lead to a large area of ​​capital flowing. The country's currency value (exchange rate) formed a major impact. The sharp depreciation of the yen since 2022 is a signal, and the RMB exchange rate will inevitably face depreciation pressure in the short term. (Zhongxin Jingwei APP)

This article is original by the Sino -Singapore Jingwei Research Institute, and the copyright of the Sino -Singapore Jingwei. Without written authorization, no unit or individual may be reprinted, extract or use in other ways.

Editor in charge: Sun Qingyang

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