Group 1 - China has reduced its holdings of US Treasury bonds by $900 million in May, marking the third consecutive month of reduction, bringing its total holdings down to $756.3 billion [1][3] - The reduction is not a result of a deliberate sell-off but rather a reflection of market fluctuations, as China actually increased its holdings of long-term bonds by nearly $5 billion during the same period [3][5] - The ongoing geopolitical tensions and the desire for asset safety are driving China to diversify its investments away from US Treasuries towards gold, euro assets, and projects related to the Belt and Road Initiative [3][5] Group 2 - The Federal Reserve's monetary policy, characterized by rising bond yields and a reluctance to lower interest rates, has created a mismatch in the bond market, affecting foreign investors' willingness to hold US debt [5][8] - President Trump’s push for lower interest rates aims to alleviate the government's debt burden, which has become a significant expenditure as the national debt exceeds $36 trillion [5][6] - The conflict between Trump and Fed Chairman Powell has escalated, with Powell emphasizing that monetary policy should not be influenced by political pressures, highlighting the importance of maintaining the integrity of the dollar [6][11] Group 3 - Japan has overtaken China as the largest holder of US Treasury bonds, with holdings reaching $1.14 trillion, while the shift in rankings reflects a broader global reassessment of the attractiveness of US debt [9][11] - Canada's aggressive purchase of over $65 billion in US Treasuries in May indicates a strategic move to support the US market amidst rising financial pressures, showcasing the intertwined political and economic relationship between the two countries [8][9]