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Of course they're net reducing the dollar assets they hold. But you don't have to sell your bonds to do that. You can just let your current bonds mature and not
by lmm 2y ago
Of course they're net reducing the dollar assets they hold. But you don't have to sell your bonds to do that. You can just let your current bonds mature and not roll them. That way there's no big selloff to spook the market.
- JumpCrisscross 2y ago> you don't have to sell your bonds to do that. You can just let your current bonds mature and not roll them They're selling like $18bn a month [1]. That is 2% of the daily trading volume [2]. Until recently, the Fed was running off 4x as much [3]. (It's still, at $40bn per month, $25bn of which are Treasuries, running off more than China is selling.) China is diversifying. But they're doing so about as cautiously as one could. [1] https://www.bloomberg.com/news/articles/2024-05-16/china-sells-record-sum-of-us-debt-amid-signs-of-diversification https://www.bloomberg.com/news/articles/2024-05-16/china-sel... [2] https://www.sifma.org/resources/research/us-treasury-securities-statistics/ https://www.sifma.org/resources/research/us-treasury-securit... [3] https://www.reuters.com/markets/us/fed-announces-reduction-balance-sheet-runoff-pace-2024-05-01/ https://www.reuters.com/markets/us/fed-announces-reduction-b...