Foreign holdings of U.S. Treasuries fell in December as the two largest foreign holders of the government debt, Japan and China, both cut their portfolios, data from the Treasury Department showed on Tuesday.
Holdings of U.S. Treasuries fell to $8.513 trillion in December from $8.633 trillion in November. Holdings had reached $8.679 trillion in September.
Japan's Treasuries holdings fell to $1.060 trillion from $1.087 trillion the previous month. Japan remains the largest foreign holder of U.S. Treasury securities. China, which is No. 2, cut its holdings to $759 billion from $768.6 billion in November.
Treasury yields surged in December on expectations of higher growth and a possible inflation resurgence as traders gauged the likely impact of tariffs and immigration reforms by the Donald Trump administration, following Trump's victory in the November presidential election.
Federal Reserve policymakers also said that they see fewer interest rate cuts in 2025 at the U.S. central bank's December meeting, citing inflation concerns.
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