Global Retreat From US Treasuries Deepens: What It Signals for Risk Assets

Foreign countries are retreating from US debt markets. Denmark’s holdings of US Treasuries are slipping to record lows, while India and China continue to scale back their exposure to US government debt.

This sustained retreat by major foreign holders points to a broader erosion of confidence in US fiscal discipline and long-term debt sustainability. This trend has major implications for global capital costs, liquidity conditions, and risk asset valuations.

In a latest post on X (formerly Twitter), The Kobeissi Letter, highlighted that over the past year, Denmark reduced its US Treasury holdings by $4 billion, a 30% decline.

“Denmark’s US Treasury holdings are at record lows: The value of US Treasuries held by Denmark is down to ~$9 billion, the lowest in 14 years…Denmark is quietly exiting US debt market,” the post read.

Since peaking in 2016, Danish holdings have dropped by more than half. The country now accounts for less than 1% of Europe’s total holdings of US government securities, valued at $3.6 trillion.

Furthermore, Danish pension fund AkademikerPension has stated it will fully divest from US Treasuries worth around $100 million by the end of the month. The fund’s Investment Director, Anders Schelde, noted that the “decision is rooted in the poor US government finances.”