Core Insights - A notable trend has emerged in global financial markets where several countries, including China, Japan, and the UK, along with the Federal Reserve, are reducing their holdings of U.S. Treasury bonds, reflecting complex considerations about the future of U.S. debt [1] Group 1: Data on U.S. Treasury Holdings - China has been continuously reducing its U.S. Treasury holdings since 2020, decreasing from a peak of $1.3 trillion to $778.1 billion as of September this year [3] - The Federal Reserve has implemented a dual strategy of interest rate hikes and selling off U.S. Treasuries to combat persistent domestic inflation, resulting in a reduction of its balance sheet to approximately $7.7961 trillion [3] Group 2: Reasons for Selling U.S. Treasuries - The total U.S. debt has surpassed $33 trillion, significantly exceeding last year's GDP of $24.5 trillion, raising concerns among central banks about a potential U.S. debt default [5] - Rising interest rates on U.S. Treasuries have increased the debt servicing burden, with annual interest payments exceeding $1 trillion [5] Group 3: Buyers of U.S. Treasuries - From last year to the first half of this year, the reduction in U.S. Treasuries amounted to $2.15 trillion, with U.S. individual investors, primarily hedge funds, increasing their holdings by $1.7 trillion, accounting for 75% of the market [6] - The rise in interest rates has made U.S. Treasuries, which now yield over 4%, attractive to risk-averse American investors seeking "risk-free" high returns [6] Group 4: Sustainability of Domestic Investment - There are concerns about whether American households can sustain their role as long-term buyers of U.S. Treasuries, as many families struggle to allocate significant funds for investment [7] - The rapid increase in U.S. debt suggests that relying solely on domestic investors may not be a viable long-term strategy, indicating potential risks in holding U.S. Treasuries [7]