WASHINGTON — Foreign investors cut their holdings of U.S. Treasury debt in June for the first time in more than a year. The decline came at a time of anxiety about whether the United States would raise its borrowing limit.
China, the biggest buyer of U.S. Treasury debt, increased its investment for a third straight month. But Japan, the second-largest buyer, along with Brazil, Russia, Hong Kong, and a group that includes the Bahamas, Bermuda, the Netherlands and the Cayman Islands cut their investments. Overall foreign holdings dropped 0.4 percent to $4.5 trillion.
Congress and the Obama administration reached a deal on Aug. 2 that allowed an increase in the borrowing limit. The agreement came hours before the U.S. faced a potential default on its debt.
The deal also included a two-stage process to cut $2.1 trillion from the deficit over the next decade. That fell short of the $4 trillion in cuts that Standard & Poor's said was needed to achieve a credible deficit-reduction plan. As a result, S&P downgraded the U.S. government's credit rating from AAA to AA+.
The June dip in overall foreign holdings represented a $15.1 billion drop from private investors and a $1.7 billion decline from government investors, such as central banks. Foreign governments account for about 72 percent of total foreign holdings of U.S. Treasury debt.
The decline by private investors included a record $18.3 billion drop in net purchases of long-term Treasury securities.
China increased its holdings 0.5 percent to $1.166 trillion.
Japan trimmed its holdings 0.2 percent to $911 billion.
Britain, the third-largest foreign holder of Treasury securities, boosted its investment 0.8 percent to $349.5 billion.
- Verizon buys Yahoo for $4.83B, marking end of...
- Historic solar flight marks first...
- Judge set to decide on $15B Volkswagen...
- Former Oregon lumber town rides digital wave...
- US home prices rise at steady pace as sales...
- Stocks waver as investors monitor company...
- US stocks rise, helped by jump in Apple shares
- Fiat Chrysler raises outlook as Q2 profits...
- Get all your outdoors work done by... 13
- Verizon buys Yahoo for $4.83B, marking... 3
- Deseret News, KSL want court records in... 3
- How to recognize the signs of a scam... 3
- Utah communities are working to stop... 3
- Historic solar flight marks first... 1
- 5 things to do when quitting your job 1
- Panel recommends options to reduce... 1