The Nasdaq MarketSite in New York City on January 2, 2026. Photographer: Michael Nagle/Bloomberg.
Foreign buyers of U.S. Treasury debt have been scooping up a growing share of note and bond auctions in recent months, allaying fears that the dollar's tarnished status as a safe haven and the country's large budget deficits would drive them away, according to interest-rate strategists at TD Securities.
Foreign and international accounts were allotted about 19 percent of the auctions in January, the largest share in nearly three years, Treasury Department data analyzed by TD show. In the past five years, the share has been as high as nearly 25 percent in early 2022, from which it dropped to under 10 percent in November 2024.
The United States sells seven types of conventional Treasury debt, with maturities ranging from 2 to 30 years, as well as three types of Treasury inflation-protected securities, or TIPS. The increase in auction shares allotted to foreign accounts "has been relatively broad-based," TD strategists Gennadiy Goldberg, Jan Nevruzi, and Molly Brooks say in a report. "The more data we get, the more we suspect that this 'Sell America' trade is more narrative than reality," Goldberg added in an interview.
The trading theme emerged in April 2025 when President Donald Trump rattled markets by announcing broad-based tariffs, and was revived last month when he resumed efforts to acquire Greenland from Denmark, a NATO ally, over its objections.
Separate Treasury Department data shows that while foreign investors sold $53 billion of Treasuries after the April 2025 tariff announcement, they subsequently added $354 billion of Treasuries through November.
"When you ask a lot of foreign investors what they're doing with their Treasury holdings, they'll admit their nervousness around other investors selling, but most—at least in our experience—haven't admitted to selling their Treasuries themselves," Goldberg said.
Foreign auction participation increased notably in November and December, suggesting that increased term premium—the excess yield offered by 10-year Treasury debt relative to shorter maturities—is a factor, according to TD.
The U.S. Treasury sold $58 billion of 3-year notes in an auction today and is slated to sell 10-year notes and 30-year bonds over the next two days. Allotments data for those sales is scheduled to be published February 24.
An absence of alternatives may be forcing investors to set aside their reservations. The weakening of the U.S. dollar suggests foreign investors may be opting to hedge their currency risk while continuing to accumulate dollar-denominated assets, Goldberg said. "From an ease-of-diversification standpoint, there's not really a lot of places for investors to go," he said.
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