May
28

Chinese Conundrum

China could reduce its Treasury holdings to signal displeasure with US trade policy, but I doubt it. In 2015 and 2016, foreign nations dumped lots of Treasuries and nothing happened. Moreover, where would the Chinese invest the money? Repatriating it would raise the value of the Renminbi and hurt exporters, and while buying German or Japanese bonds is doable, their interest rates are dismal, and those markets are less liquid.

Share This Post
Facebook Twitter Email

Speak Your Mind

*

This site uses Akismet to reduce spam. Learn how your comment data is processed.