Where Have All the Foreign Buyers Gone for U.S. Treasury Debt? – WSJ

Foreigners no longer have an insatiable appetite for U.S. government debt. That s bad news for Washington.

The U.S. Treasury market is in the midst of major supply and demand changes. The Federal Reserve is shedding its portfolio at a rate of about $60 billion a month. Overseas buyers who were once important sources of demand China and Japan in particular have become less reliable lately.  

Meanwhile, supply has exploded. The U.S. Treasury has issued a net $2 trillion in new debt this year, a record when excluding the pandemic borrowing spree of 2020. 

via www.wsj.com

Prof. Krugman must be wondering why the bond market can’t figure out how wonderful everything is.