Foreign Money Isn’t Flinching – It’s Still Buying America

• Headlines still warn of a foreign exodus from U.S. bonds.

• Despite occasional dips, most months show rising interest.

• Today, foreign holdings of Treasurys are pushing record highs.

One of the hardest parts of investing is separating the signal from the noise…

Traditional financial media isn’t making that any easier. Their coverage of markets, especially anything involving the Federal Reserve, has settled into a predictable formula. After every policy meeting, the same script plays out: identify the most alarming data point, amplify it, and let the headlines carry the emotional load. The incentives favor anxiety, not accuracy.

Last week’s monetary policy meeting was no exception. The Fed held rates steady. The FOMC kept its bias toward easing. Chairman Jerome Powell reiterated that no one on the committee wanted to raise rates. Those are the facts.

But the headlines didn’t linger on the facts. Instead, they spotlighted “dysfunction” at the Fed, zeroing in on the three hawkish dissenters who preferred removing the bias language. From there, the narrative quickly morphed into speculation about tension with the incoming chair, Kevin Warsh, and what that might mean for foreign confidence in U.S. debt. That storyline helped push Treasury yields back toward the top of their recent range…

Here’s what rarely gets airtime: when the narrative shifts, the noise rarely updates with it. Whether it’s a reluctance to sound optimistic or a belief that good news doesn’t convert, follow‑through is often missing. The dissenters were hawks and already predisposed to tighter policy. That context matters. Without it, investors end up reacting to echoes rather than reality.

And the reality, according to the latest Treasury Department data, is straightforward: foreign holdings of U.S. Treasurys keep rising, setting new records over the past year. If the domestic economy stays resilient and global political uncertainty persists, demand for U.S. debt could strengthen even further.

But don’t take my word for it, let’s look at what the data’s telling us…

U.S. Treasurys remain one of the safest assets on the planet. They’re liquid, they can be sold quickly to raise cash, and they provide reliable income. The U.S. dollar is still the world’s primary reserve currency, which means global transactions require dollar‑denominated assets. That creates a constant baseline demand for U.S. debt.

The cleanest way to track foreign appetite is through Treasury International Capital (“TIC”) data. It offers a monthly snapshot of who’s buying and selling Treasurys, stocks, and corporate bonds. Headlines focus on yields and politics, but TIC data reveals the deeper story behind global capital flows. It’s one of the few tools that helps investors separate emotion from reality.

The chart below shows foreign Treasury holdings from April 1970 through February 2026 (the most recent data). The line keeps climbing, recently hitting a new high near $9.5 trillion…

Since the current administration took office, its priority has been clear: drive borrowing costs lower. Treasury Secretary Scott Bessent has said the government will use every lever it controls to pull down long‑term yields. The logic is straightforward. Most major loans—mortgages, auto financing, business credit—ultimately hinge on the 10‑year Treasury. Lower that benchmark, and households spend less on debt while businesses find it easier to borrow and invest. In other words, easing pressure on the 10‑year isn’t just a market preference; it’s a policy objective aimed at boosting economic momentum.

That’s why the latest narrative has zeroed in on the Fed’s independence. Critics argue that the central bank could be perceived as aligning with short‑term political goals due to the appointment of Warsh. The concern is that the Fed might drift away from its role as a guardian of price stability. From there, the storyline escalates into warnings about an “inflation tax” on foreign holders of U.S. debt and the broader theme of “de‑dollarization.”

But the narrative runs into a familiar problem: there’s no viable alternative. Headlines highlight foreign selling and soft auction demand. Yet private capital keeps flowing back into the U.S. to capture yields that Europe and Japan simply cannot match.

The “Sell America” story ends up functioning less like a prediction of imminent collapse and more like a long‑duration warning light, or a barometer of global trust. Every pop in gold, every wobbly auction, every whisper about reserve diversification becomes another data point in the slow‑motion question of whether the world is preparing for a post‑American financial order.

Still, the narrative hasn’t caught up. Recent data tell a different story…

The above chart of foreign Treasury holdings since mid‑2024 shows brief pullbacks followed by even stronger rebounds. Total holdings continue to set new records.

At the end of the day, don’t get lost in the noise. Focus on the signal. Foreign governments and global money managers continue allocating capital to U.S. assets. Treasurys remain liquid and income‑generating. The dollar remains the world’s reserve currency. And if the Fed resumes easing, yields could fall even further. All of this points toward stable borrowing costs and steady long‑term economic growth.

Five Stories Moving the Market:

U.S. President Donald Trump’s desire to end the Iran war is being put to the test after Tehran fired at American warships and violently disrupted a U.S. effort to revive shipping in the Strait of Hormuz; U.S. officials say Trump has waivered between severely punishing Iran for failing to abandon its nuclear work, and avoiding a significant escalation – WSJ. (Why you should care – White House officials said Trump would prefer to negotiate an end to Iran’s nuclear ambitions in addition to the current conflict)

U.S. Treasury Secretary Scott Bessent called on allies and China to join an American operation to escort ships through the Strait of Hormuz even as he claimed the nation has total control of the vital waterway for the global oil trade – Bloomberg. (Why you should care – Bessent said four or five ships exiting the Strait every day should help to reduce the global supply shortage of 10 billion barrels per day)

Palantir Technologies raised its ‌annual revenue forecast and beat estimates for quarterly results, a sign of growing demand for its data analytics software from the U.S. government and commercial clients – Reuters. (Why you should care – management still expects expenses to “ramp up” in 2026)

ServiceNow projected it could generate as much as $32 billion of subscription revenue in 2030, attributing the strong outlook to traction from its AI products; by then, about 30% of the software company’s annual contract value will come from Now Assist, its flagship artificial intelligence offering, according to Chief Financial Officer Gina Mastantuono – Bloomberg. (Why you should care – such an outcome would be roughly 25% higher than analysts’ current estimates)

The global economy’s resilience in the face of the Iran conflict reflects ample energy reserves, policies to help consumers, and the offsetting effects of the artificial-intelligence boom that is powering trade and business investment in the U.S. and beyond; countries have become steadily more energy efficient, squeezing more economic activity out of each drop of oil or cubic meter of natural gas burned – WSJ. (Why you should care – global energy intensity has dropped by about one-third since 2000)

Economic Calendar:

Earnings: AEP, AMD, ANET, BUD, CMI, DUK, EOG, ETN, LITE, OXY, PFE, SHOP

Markets in China, Japan, and South Korea are Closed

Australia – Reserve Bank of Australia Monetary Policy Announcement (12:30 a.m.)

U.S. – Building Permits (MoM) (8:00 a.m.)

U.S. – Exports, Imports for March (8:30 a.m.)

Canada – Exports, Imports for March (8:30 a.m.)

ECB President Lagarde (President) Speaks (8:30 a.m.)

ECB’s De Guindos (Vice President) Speaks (8:30 a.m.)

U.S. – S&P Global U.S. Services, Composite PMI (Final) for April (9:45 a.m.)

U.S. – ISM Non-Manufacturing PMI for April (10:00 a.m.)

U.S. – JOLTS Job Openings for March (10:00 a.m.)

U.S. – New Home Sales for March (10:00 a.m.)

Treasury Auctions $75 Billion in 6-Week Bills (11:30 a.m.)

Fed’s Barr (Board Member) Speaks (12:30 p.m.)

Fed’s Bowman (Board Member) Speaks (12:30 p.m.)

U.S. - American Petroleum Institute Crude Oil Inventory Data (4:30 p.m.)