America's improving fiscal health is starting to be reflected in the market for Treasuries.

As the Federal Reserve scales back its unprecedented bond buying this year, the ability of the world's largest debtor nation to attract investors underscores the strides the U.S. has made to strengthen its creditworthiness after the worst financial crisis since the Great Depression. With the budget deficit at a seven-year low and household wealth rising to a record, investors from mutual funds to foreign central banks are buying a greater share of Treasuries at government auctions than ever before, as bond dealers that are obligated to bid by a smaller share.

“This goes a long way to blunting the criticism of investing in the U.S. dollar,” Wan-Chong Kung, a bond manager at Nuveen Asset Management, which oversees more than $100 billion, said in an April 2 phone interview from Minneapolis.