1 hr ago

Dalio Warns China and Japan Could Reduce Treasury Demand

The U.S. government borrows money by selling bonds called Treasuries.

Ray Dalio says China and Japan may buy fewer of these bonds or reduce the ones they already own.

That could make it harder or more expensive for the U.S. to borrow.

Japan and China have already reduced their reported Treasury holdings.

U.S. Treasury yields have risen, and investors are also worried about government borrowing and inflation.

Treasury Secretary Scott Bessent says economic growth and spending cuts can help change the borrowing trend.

Dalio also says some large technology companies may have trouble finding enough money for their artificial intelligence spending.

He warned that debt repayments or other pressures could cause an AI bubble to burst.

Key facts

Foreign reliance: The U.S. depends on foreign investors for about a third of its debt.
Japan holdings: Japan’s Treasury holdings fell by $12.8 billion in July to about $1.1 trillion.
China holdings: China’s reported Treasury holdings were about $618 billion in July, down from a peak of $1.3 trillion in 2013.
Belgium holdings: Belgium’s reported Treasury holdings stood at $470.7 billion; analysts cited in the article say some Chinese holdings may be held through other countries.
Treasury yields: Yields on 10-year U.S. Treasuries were around 5.3%, near their highest levels since 2002.
Bond performance: Global bonds had lost 3% and Treasuries 2.8% during the year, according to Bloomberg data.
Dalio’s debt warning: Dalio said the U.S. could face a debt crisis within three years.

financialexpress.com · 1 hr ago