Foreign ownership of US debt slips again in May

AP News
Posted: Jul 18, 2016 4:11 PM
Foreign ownership of US debt slips again in May

WASHINGTON (AP) — Foreign holdings of U.S. Treasury securities fell for the second straight month in May.

The Treasury Department said Monday that total foreign holdings dropped 0.5 percent to $6.21 trillion after slipping 0.8 percent to $6.24 trillion in April.

Japan, the second-biggest foreign owner of Treasury securities, reduced its holdings by 0.8 percent to $1.13 trillion. China, the biggest foreign investor in Treasurys, increased its holdings slightly to $1.24 trillion. Mexico cut its Treasury holdings by 9.3 percent to $59.8 billion.

The national debt is nearly $19.4 trillion and is expected to grow, which means the United States will need foreigners to keep buying Treasury securities.

Of the debt total, nearly $14 trillion is publicly traded on financial markets. The rest is money the government owes itself, including holdings in the Social Security trust fund.

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Foreigners own more than 40 percent of the publicly traded debt. Most of those holdings — more than $4 trillion — belong to foreign governments, primarily central banks. They see Treasury securities as one of the world's safest investments.