GoKawiilForeign Central Banks Pull Back on US Treasuries as Hedge Funds Fill Gap via Offshore Hubs
Treasury Department data shows foreign official holdings of US Treasuries fell to $3.77 trillion in July, roughly the same level as 2012, even though total Treasury debt outstanding has tripled since then. Their share of marketable Treasuries has dropped to 12.8%, the lowest since 1993, while overall foreign holdings—including private investors—still hit $9.25 trillion, buoyed by activity in offshore financial centers like the Cayman Islands.
GoKawiil's interpretation of the reporting above, not reported fact.
This shift means the US government is relying less on foreign governments to fund its deficits and more on private players, particularly hedge funds using leveraged strategies through opaque offshore centers. That change alters who really controls demand for US debt and adds a layer of financial complexity and risk that isn't visible in official 'foreign' ownership statistics.
- Foreign official Treasury holdings fell to $3.77 trillion in July, back to 2012 levels despite the debt tripling since then.
- Their share of marketable Treasuries dropped to 12.8%, the lowest since 1993.
- Private foreign holdings, often channeled through hedge funds in offshore hubs like the Cayman Islands, are increasingly filling the gap.
Source: wolfstreet.com, 2026-09-18
Published there as: “US Treasuries Have Become Unappetizing for Foreign Central Banks and Governments”
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