Talk of China selling Treasuries to hurt tariff man may be misplaced, pros tell Yahoo Finance.
China best keep from adding one weapon to its arsenal in its escalating trade war with President Donald Trump. Because if it doesn’t, the blowback on its own financial markets — and the globe more broadly — could be severe and painful.
At $1.1 trillion, China is the largest holder of U.S. Treasury debt — just narrowly ahead of Japan. While China has reduced its holdings of Treasuries in recent years, any amount of pronounced dumping could send U.S. interest rates skyrocketing. More supply of Treasuries on the market, prices down, yields up is the good ole’ equation.
An unlikely move“Don't be surprised if the topic of China's U.S. Treasury pile makes headlines,” points out Societe Generale strategist Kit Juckes. “Mutterings of Chinese Treasury selling would be a good catalyst for a bond market correction.”
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