China Sell-off 39% of US treasury: What’s going on?

The U.S. government continues to view Treasury securities as reliable and secure investments, especially during times of economic uncertainty. However, concerns are growing over the nation’s expanding debt, which reached about $32.6 trillion by August 2024. Critics warn that this rising debt could pose long-term risks to the economy, potentially leading to inflation and higher borrowing costs. Another key issue of the US economy is the U.S.’s dependence on foreign investment to help fund its debt. As of August 2024, China remains the second largest foreign holder of U.S. debt. However China has significantly dropped its holding to approximately $770 billion, a 39% decline compared to less than a decade ago. This shift is tied to broader geopolitical and economic changes, raising concerns about the stability of foreign funding and its potential effects on U.S. economic policy. This video explores the impact of China’s decisions on the U.S. economy, analyzing both historical and current perspectives. It also examines how the outcome of the U.S. election could potentially influence China’s approach to its U.S. Treasury holdings.