Tags: only federal reserve owns more us debt than china

CNS News: Only Fed Owns More US Debt Than China

CNS News: Only Fed Owns More US Debt Than China
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By    |   Friday, 10 November 2017 08:36 AM

Only the Federal Reserve owns more U.S. federal government debt than entities in the People’s Republic of China, CNS News reported, citing the latest data released by the Treasury and the Federal Reserve.

As of the end of August, according to the Treasury, entities in Mainland China owned $1.2 trillion in U.S. Treasury securities.

The only other nation that came close to that was Japan. Entities located there owned $1.1 trillion in U.S. Treasury securities as of the end of August, CNS News reported.

As of August 31, the same date applicable to the foreign holdings cited above, the Federal Reserve owned $2,465,300,000,000 in U.S. Treasury securities, according to its weekly statistical release. As of Nov. 2, the Federal Reserve owned $2,459,827,000,000 in U.S. Treasury securities.

Meanwhile, some see risks emerging in China's dollar-denominated bonds that could give the Fed greater pause for thought as it raises rates, even as other central banks signal a shift from ultra-easy policy, Reuters reported.

To be sure, Fed officials have not publicly flagged China's debt as a major risk in their policy discussions. However, debt analysts point to the possibility of another September 2015 moment in which the Fed takes its cues from concerns about China.

"Back then, I said that U.S. monetary policy is not made in Washington, it's made in Beijing," said Joachim Fels, global economic adviser at bond giant PIMCO.

"China does have a major impact on monetary policies elsewhere ... This year has been smooth sailing for global central banks because there were no shockwaves from China but I expect that to change if we think beyond the next few months."

The outstanding amount of dollar bonds issued by Chinese entities has grown almost 20 times since the 2008-09 global financial crisis to just over half a trillion dollars, according to data from the Bank for International Settlements. Since September 2015, it has grown almost 50 percent.

China's dollar bonds are now almost a third of the emerging market total dollar issuance, up from a quarter in September 2015 and less than 5 percent before the Fed first began printing money in December 2008.

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Only the Federal Reserve owns more U.S. federal government debt than entities in the People’s Republic of China, according to the latest data released by the Treasury and the Federal Reserve.
only federal reserve owns more us debt than china
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2017-36-10
Friday, 10 November 2017 08:36 AM
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