The auction of 61 billion U.S. Treasury bonds with a five-year term was surprisingly ignored, while China, on the contrary, is increasing its holdings of U.S. Treasury bonds in large amounts.

What is the reason behind this?

Are we going to be the ones to pick up the slack again?

Recently, the U.S. Treasury bond auction of 61 billion was truly astonishing!

Although the sales volume set a new high since 2021, the winning interest rate was 4.055%, 2 basis points higher than expected, setting the largest tail spread in a year and a half.

Additionally, the bidding multiple also reached the lowest point in a year and a half.

On the contrary, the U.S.'s own primary dealers became the ultimate slack pickers, with the allocation ratio setting a new high in a year and a half.

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This issue of U.S. Treasury bond issuance really seems like the U.S. is playing with itself.

This further indicates that everyone is very uninterested in this issue of U.S. Treasury bonds.

There are two reasons for this.

One is that recently, due to the strong U.S. PMI data, the confidence in the expectation of interest rate cuts in the dollar has been weakened.

We must understand that a dollar rate cut corresponds to an increase in the price of U.S. Treasury bonds.

Now, the uncertainty of the expectation of dollar rate cuts means that investing in U.S. Treasury bonds also carries certain risks.

The second reason is the uncertainty of everyone's expectations for the U.S. economy in the medium term.

Especially with unclear signals of dollar rate cuts and hikes, this will lead to an uncertain U.S. economy for a period in the future.

It's better for everyone to wait and see rather than gamble.

We must understand that capital is profit-driven, and everyone is not up early without profit.

No matter how well the U.S. sings, it's useless.

However, a very strange phenomenon has occurred, that is, China increased its holdings of U.S. Treasury bonds by 12.4 billion in November, and now the scale of U.S. Treasury bonds has reached 782 billion U.S. dollars, ending a seven consecutive reduction.

Are we going to be the slack pickers again?

Don't worry, in November, the top three foreign debt holders of U.S. Treasury bonds, Japan, China, and the United Kingdom, all increased their holdings of U.S. Treasury bonds.

Of course, this is related to the strengthening expectation of dollar rate cuts and the rise in the price of U.S. Treasury bonds at that time.

So, a large part of our country's increase in U.S. Treasury bonds in November was a passive increase.

Looking at our country's behavior of continuously increasing gold holdings for 14 months, the path of de-dollarization in the long term will not change.

As expected, in December and January, as the expectation of dollar rate cuts weakens, our country will reduce its holdings of U.S. Treasury bonds again.

However, to put it bluntly, our country is no longer like 20 years ago, relying on dollar rate cuts or hikes to promote economic development.

In 2024, whether it's a dollar rate hike or a rate cut, our country's continuous development of high-end industries, multi-policies to promote domestic circulation, and two hands to drive stable economic growth are a sure thing.

On the contrary, the U.S., due to the ugly data of U.S. Treasury bond issuance, the risk of the Federal Reserve maintaining higher interest rates for a longer period is constantly increasing!