China Weighs Slowing or Halting Purchases of U.S. Treasuries
January 10th, 2018Via: Bloomberg:
China added to bond investors’ jitters on Wednesday as traders braced for what they feared could be the end of a three-decade bull market.
Senior government officials in Beijing reviewing the nation’s foreign-exchange holdings have recommended slowing or halting purchases of U.S. Treasuries, according to people familiar with the matter. The news comes as global debt markets were already selling off amid signs that central banks are starting to step back after years of bond-buying stimulus. Yields on 10-year Treasuries rose for a fifth day, touching the highest since March.
This really is the sort of thing that could pop the very frothy stock-market bubble. True, bonds aren’t stocks, but I really think that the financial markets are in such “blow-off top” territory right now that a mere salutary effect of a major decision such as this could be a bubble-popper.
I read the Fed wants to raise interest rates in the years to come anyhow. This would mean increased incentives for foreign investment and currency holding.