Foreign Holdings of U.S. Treasuries Hit Record $9.05 Trillion in March Amid Global Demand Surge

In March 2025, foreign holdings of U.S. Treasuries climbed to an unprecedented $9.05 trillion, which was a major achievement, as reported by the U.S. Treasury Department. This figure reflects a $233 billion increase from February’s $8.81 trillion and a nearly 12% rise compared to the previous year.

The surge, which continued for the third consecutive month, underscores the persistent global appetite for U.S. government debt, even as economic policies under President Donald Trump introduced uncertainties.

The data highlights the pivotal role of U.S. Treasuries as a safe-haven asset, particularly in a period marked by geopolitical and trade-related turbulence.

Shifting Dynamics in Treasury Ownership

The composition of foreign holders saw notable changes. Japan retained its position as the largest non-U.S. holder, with its Treasury stash growing to $1.13 trillion, a 0.4% increase from February.

Meanwhile, the United Kingdom surpassed China to become the second-largest holder, with $779 billion in holdings. People often attribute the UK's rise to its role as a custodial hub for hedge funds, partnering with countries like the Cayman Islands and the Bahamas.

However, China continued a downward trend in 2018, reducing its Treasury holdings to $765.4 billion from $784.3 billion in February. This reduction aligns with China’s strategic diversification of reserves amid ongoing trade tensions with the U.S.

Did You Know?
The U.S. Treasury market is the world’s largest and most liquid bond market, with over $26 trillion in outstanding debt as of 2025, making it a cornerstone of global finance.

Impact of Tariff Policies and Market Reactions

The robust demand for Treasuries in March occurred against the backdrop of significant policy shifts. On April 2, 2025, the Trump administration implemented a sharp increase in tariffs, particularly targeting Chinese goods, which triggered a sell-off in U.S. Treasuries.

These events pushed the benchmark 10-year Treasury yield from 4.18% at the start of March to 4.425% by month-end, with yields peaking at nearly 4.6% between April 3 and 11.

The sell-off likely involved foreign investors, as market analysts noted a cautious approach to U.S. assets following the tariff hike. However, Trump’s decision to pause tariffs for 90 days has since stabilized the market, though foreign investors remain wary.

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Broader Investment Trends and Real-Time Insights

Beyond Treasuries, foreign investment in other U.S. asset classes showed mixed performance. March saw a net inflow of $123 billion in Treasury bonds and notes, up from $106.2 billion in February.

U.S. corporate bonds attracted $60.4 billion, while agencies experienced outflows of $10.4 billion. U.S. equities recorded inflows of $10.4 billion, a decline from February’s $24.7 billion.

Overall, net foreign acquisitions of long- and short-term securities, including banking flows, posted a net outflow of $254.3 billion, slightly higher than February’s $248.9 billion.

Real-time data from financial news outlets indicates that foreign investors are increasingly selective, favoring U.S. assets with stable returns amid global uncertainties, such as rising inflation in Europe and geopolitical tensions in Asia.