Mind on the MarketChart of the Week

Key arguments

• De-dollarization headlines are less relevant than the changing composition of Treasury demand; gradual reserve diversification matters more than any near-term loss of dollar dominance.
• Foreign holdings have grown in dollar terms but not kept pace with Treasury supply, so other buyers must step in to balance the market.
• Private investors, now 58.1% of foreign holdings, are more price-sensitive than official reserve managers, so Treasuries increasingly compete for capital and may require higher yields to absorb supply.
• A more price-sensitive buyer base may raise term premium and volatility, with implications for duration, credit, mortgage and refinancing costs.

Corresponding source evidence

1. Instead, the focus should be on how gradual reserve diversification may change the composition of Treasury demand.
2. Contact Selam Mola Fixed Income Client Portfolio Manager Page 2 Weekly Highlights Foreign ownership of US Treasury debt Private share of foreign treasury holdings Projected US federal deficit (FY2026) $9.2T Source: Board of Governors of the Federal Reserve System.
3. $1.9T Source: Congressional Budget Office, The Budget and Economic Outlook: 2026 to 2036. · 2026