BIT Official: The United States federal government’s outstanding public debt is approaching $40 trillion, and market concerns about rising risks from Japan and China reducing their holdings of U.S. Treasuries are intensifying.

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Golden Finance News reported that on July 24, BIT Official released a weekly report saying that in the coming days, investors may begin to focus on the fact that the United States federal government’s total outstanding public debt is nearing $40 trillion. As long as the U.S. economy continues to grow and overseas investors are still willing to finance the budget deficit and debt, fiscal spending can continue to expand without immediately facing obvious market constraints.
However, market concerns are rising: sovereign states such as Japan may gradually reduce their holdings of U.S. Treasury bonds to support a rapidly depreciating yen. Especially after nearly two decades of near-zero interest rate conditions, Japan currently also seems to be facing increasingly prominent domestic inflation pressure.
The era of near-zero interest rates has ended. As U.S. Treasury yields rise, they not only reflect the market’s concern that Japan may sell off its holdings of U.S. Treasuries, but also increasingly price in the risk that China may further reduce its U.S. Treasury holdings, especially after Trump accused Beijing of intervening in U.S. elections. With the U.S. midterm elections approaching in early November, this issue is expected to receive more attention and could further tighten relations between China and the U.S. Meanwhile, China continues to diversify its foreign exchange reserves, gradually reducing its allocation to U.S. Treasuries and increasing its gold reserves.
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