Yields on U.S. government debt increased after reports indicated that Chinese regulators have encouraged financial institutions to scale back investments in Treasuries. The yield on the benchmark 10-year note reached 4.248%, up roughly three basis points for the day, following earlier levels near 4.22%.
According to individuals familiar with the development, Chinese officials have directed banks to restrain their purchases of U.S. government bonds and reduce exposure when holdings are elevated. This guidance, which surfaced through a recent Bloomberg report, is understood to be motivated by an aim to diversify financial risks. It does not reflect a strategic withdrawal linked to political frictions or concerns about the credit quality of U.S. government debt.
The approach aligns with the broader financial market trend referred to as the “Sell America” strategy, which gained prominence in early 2026. This approach involves reducing stakes in U.S. assets—including Treasuries, equities, and the dollar—in light of ongoing worries related to U.S. debt levels, tariff policies, and geopolitical risks. However, the intention is to rebalance portfolio risk rather than execute a full-scale exit from U.S. markets, and there have been no specified targets regarding the extent or timing of these adjustments.
While U.S.-China relations remain strained, the two countries experienced a period of improved stability after reaching a trade truce last year. No further guidance has been provided regarding potential next steps.
