Foreign holdings of US Treasury debt declined in July

Markets Associated Press

Foreign holdings of U.S. Treasury securities fell in July as China, the biggest foreign owner of Treasury debt, trimmed its holdings.

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The Treasury Department says total foreign holdings dropped 0.6 percent in July to $6.25 trillion following a 1.1 percent increase in June.

China reduced its holdings 1.8 percent to $1.22 trillion, the second straight monthly reduction. Japan, the second-biggest foreign owner of Treasury securities, increased its holdings 0.7 percent to $1.15 trillion.

The Congressional Budget Office is forecasting that the national debt, which currently stands at $19.5 trillion, will increase by $8.6 trillion over the next decade, reflecting rising costs for Social Security and Medicare benefits as baby boomers retire. That rising debt underscores the need for the United States to maintain high foreign demand for Treasury debt.