00:00It's Benzinga, bringing Wall Street to Main Street.
00:02Federal Reserve has sold about $1.5 trillion in U.S. Treasury since May 2022.
00:07More than all foreign holders combined, according to Benzinga.
00:10That massive drawdown reflects the Fed's quantitative tightening strategy,
00:14aiming to shrink its balance sheet and fight inflation.
00:16Data from Crestcat Capital's Octavia Costa shows foreign holders like China, Japan,
00:22Germany, and Canada maintain relatively steady holdings, while the Fed's portfolio plunged.
00:27Costa warns the shift may create a structural demand gap in the Treasury market.
00:31He argues that the U.S. may eventually need to re-engage as a primary buyer.
00:35He also suggests this trend tilts the country toward full financial repression.
00:40With the government channels capital inward, a quantitative tightening may end.
00:44Costa insists it does not itself overall Treasury demand structurally.
00:48For all things money, visit Benzinga.com.
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