Interest rate strategists at TD Securities stated that foreign buyers have consistently increased their participation in US medium- and long-term Treasury auctions in recent months, easing market concerns that safe-haven appeal might be diminishing or that massive fiscal deficits could deter overseas capital.
Analysis of US Treasury Department data by TD Securities revealed that foreign and international accounts accounted for approximately 19% of allocations in US Treasury auctions in January, reaching the highest level in nearly three years. Over the past five years, this proportion peaked at nearly 25% in early 2022 before declining to below 10% by November 2024.
The United States issues seven conventional Treasury securities with maturities ranging from two to thirty years, along with three types of Treasury Inflation-Protected Securities (TIPS). TD Securities strategists Gennadiy Goldberg, Jan Nevruzi, and Molly Brooks noted in a report that the increase in foreign account allocations during Treasury auctions has been "relatively broad-based."
"The more data we accumulate, the more it appears that the so-called 'selling America' trade is more of a narrative than a reality," Goldberg commented in an interview.
Separate data from the US Treasury Department indicated that foreign investors sold $53 billion in US Treasuries following the announcement of tariffs in April 2025 but subsequently increased their holdings by $354 billion through November.
"When you ask many foreign investors about their handling of US Treasury positions, they admit to being nervous about other investors selling, but based on our experience, most have not acknowledged selling themselves," Goldberg stated.
TD Securities highlighted that foreign investor participation notably rose in November and December Treasury auctions, suggesting that widening term premiums—the additional yield offered by 10-year Treasuries compared to shorter-term bonds—were a contributing factor.
The US Treasury auctioned $58 billion in 3-year notes on Tuesday and plans to issue 10-year and 30-year bonds over the next two days. Allocation data for these auctions is expected to be released on February 24.
Goldberg suggested that a lack of viable alternative assets may be compelling investors to set aside concerns temporarily. A weaker US dollar indicates that foreign investors might be continuing to accumulate dollar-denominated assets while hedging currency risk.
"From a diversification perspective, investors don't really have many other choices," he pointed out.