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🇨🇳 China may be quietly tightening financial pressure on the US
While headlines focus on Trump, Xi handshakes, China’s holdings of US Treasuries have fallen to their lowest level since 2008, just $693B. Beijing has been steadily reducing its Treasury exposure since 2022. Why markets care:
➡️ Selling Treasuries pushes yields higher
➡️ 30Y Treasury yields are already above 5%
➡️ The US must refinance debt at increasingly expensive rates
➡️ Interest payments on national debt keep exploding
➡️ Budget deficits are projected to approach $2T in 2026
➡️ The Fed can’t aggressively cut rates because inflation remains sticky
The result is a nasty feedback loop:
🔄 more debt → higher yields → even more debt. Officially, China calls this “reserve diversification.”
Unofficially, it looks a lot like weakening your biggest geopolitical rival by forcing it to drown in its own debt pile. 💛
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