Foreigners could trigger higher UST supply when USD strengthens, Luke Gromen warns - Traders Union
Foreigners could trigger higher UST supply when USD strengthens, Luke Gromen warns - Traders Union
Source: Traders Union
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DW NOTE
Luke Gromen notes that if the dollar rallies sharply, foreign holders might liquidate UST positions to meet home-currency liabilities — forcing Treasury to issue more debt into a thinner buyer base. He's describing a reflexive trap: the very strength that's supposed to signal confidence becomes the mechanism for a funding crisis. With the 10-year at 4.77% and deficit spending running 3% ahead of last year, the question isn't whether foreign bid matters, it's what happens when it disappears all at once.