July 18, 2016 - 1:13 PM
WASHINGTON - 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 per cent to $6.21 trillion after slipping 0.8 per cent to $6.24 trillion in April.
Japan, the second-biggest foreign owner of Treasury securities, reduced its holdings by 0.8 per cent 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 per cent 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.
Foreigners own more than 40 per cent 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.
News from © The Associated Press, 2016