China’s holdings of U.S. treasury bonds, notes and bills fell to $1.17 trillion in January from $1.18 trillion the previous month, its lowest level since July, Bloomberg reports.
Data released by the Treasury Department yesterday also showed that China remains the largest foreign holder of U.S. debt. Japan occupies the second spot. Total foreign ownership of Treasuries contracted for the third consecutive month in January to $6.26 trillion, falling from its record high of $6.32 trillion in October.
The U.S. bond market saw a particularly weak month in January, with investors worried that higher inflation could force the Fed towards another rate hike.