China Instructs Banks To Reduce Holdings Of US Treasuries, Though Some Consider This "Barely A Concern"

Chinese Regulators Advise Banks to Reduce US Treasury Holdings

US Treasury yields climbed to their highest levels of the session after midnight ET, following a Bloomberg report that Chinese authorities had instructed financial institutions to scale back their investments in US Treasuries. The move was reportedly prompted by worries about excessive concentration and increased market volatility.

According to sources familiar with the situation, officials encouraged banks to curb new purchases of US government bonds and told those with significant exposure to gradually reduce their holdings. This guidance, delivered verbally to several major Chinese banks in recent weeks, does not affect the country's official state-owned Treasury reserves.