China has aggressively trimmed its holdings of U.S. sovereign debt to levels not seen since the global financial crisis, exacerbating a historic fixed-income selloff that has pushed the 10-year Treasury yield toward the critical 5% threshold.
The Great Treasury Exodus
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Capital flight is hitting the U.S. bond market as major global central banks rapidly unwind their dollar-denominated debt. According to data from Macromicro.me, foreign holdings of U.S. Treasuries fell by $139 billion in March—marking the “largest monthly decline since September 2022.”
The world's largest economic superpowers heavily drove the liquidation. Japan, the top foreign holder, reduced its stockpile by $48 billion to fund yen interventions. However, the most profound structural shift came from Beijing.
