Treasury holdings


 Another great graph from Torsten Slok at Apollo

Foreigners hold less, Fed holds more. However, the Fed doesn’t really hold Treasurys. The Fed turns Treasurys into interest-paying reserves, which banks hold. And banks turn reserves into bank deposits and other assets which we hold. So it is really a big shift from foreign to domestic holding. At, as a commenter on a previous post reminds us, current interest rates, exchange rates, and rates of other opportunities, which may change. So much for exorbitant privilege? 



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