The Federal Reserve implements a tightening plan, and the market mostly profits from the high cash rate💰
Some investors believe that the current rise in yields is due to foreign investors selling U.S. Treasuries. This is a misunderstanding, because foreign investors are still net buyers of U.S. Treasuries in 2023, with a year-to-date scale of $275 billion. , the real reason is that the Federal Reserve continues to implement the quantitative tightening plan, allowing the balance sheet to shrink, which is equivalent to a net sale of US$720 billion in U.S. debt. In addition, due to the sharp rise in interest rates, U.S. commercial banks have reduced their duration risks and become net sellers. Major sellers of U.S. Treasuries with $170 billion in withdrawals; on the other hand, mutual funds and money market funds jointly funded the Fed's reduction in holdings, and individual savers collectively purchased $875 billion in bonds to profit from high cash rates In fact, according to estimates by Goldman Sachs, 73% of this year’s U.S. debt purchases come from American households. Who said Americans don’t save at all?
