{"id":89281,"date":"2026-01-19T09:01:43","date_gmt":"2026-01-19T09:01:43","guid":{"rendered":"https:\/\/www.taxresearch.org.uk\/Blog\/?p=89281"},"modified":"2026-01-19T09:01:43","modified_gmt":"2026-01-19T09:01:43","slug":"will-a-us-treasury-sell-off-work","status":"publish","type":"post","link":"https:\/\/www.taxresearch.org.uk\/Blog\/2026\/01\/19\/will-a-us-treasury-sell-off-work\/","title":{"rendered":"Will a US Treasury sell off work?"},"content":{"rendered":"<p>I was <a href=\"https:\/\/www.taxresearch.org.uk\/Blog\/2026\/01\/18\/can-europe-rise-to-the-us-challenge\/comment-page-1\/#comment-1063616\" target=\"_blank\" rel=\"noopener\">asked this question on the blog<\/a> yesterday:<\/p>\n<blockquote><p>Would a mass sell off of US Treasuries by EU and others put pressure back on Trump and his Congress?<\/p><\/blockquote>\n<p>Since it is doing the social media rounds, I gave this question some thought and responded as follows (with some editorial improvements on reposting):<\/p>\n<hr \/>\n<p>Yes, it could, but the chain of effects is indirect and politically messy.<\/p>\n<p>A mass sell-off of US Treasuries by foreign holders would, all else equal, push Treasury prices down and yields up. That would tend to:<\/p>\n<ul>\n<li>Increase US government interest costs, especially on new issuance.<\/li>\n<li>tighten US financial conditions, meaning higher rates across the mortgage and corporate debt markets, and<\/li>\n<li>Unsettle risk markets.<\/li>\n<\/ul>\n<p>All of that would create political pressure on any administration, including Trump\u2019s. However, there are big caveats.<\/p>\n<p>First, Treasuries are the world\u2019s core safe asset. In a true panic, many investors often run towards Treasuries, not away from them. So coordinated foreign selling could be partly offset by domestic and global private buying.<\/p>\n<p>Second, the Federal Reserve can stabilise yields through purchases, using measures such as QE, if it chooses. The US, as the issuer of the dollar, cannot be funding-constrained by dollar-relatedissues.<\/p>\n<p>Third, foreign holders selling Treasuries are also harming themselves: they either crystallise losses or they must find an alternative reserve asset of comparable scale and liquidity, and there is none at the same depth at present.<\/p>\n<p>So, foreign sales could signal diplomatic and financial disapproval and cause disruption, but they are not a reliable weapon that would force Congress to change course. It would create pressure mostly via higher rates, market volatility and a weaker dollar, but the US has unusually strong tools to absorb that pressure, meaning the measure might not work.<\/p>\n<p>I do not buy this argument as a result.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>I was asked this question on the blog yesterday: Would a mass sell off of US Treasuries by EU and others put pressure back on<br \/><a class=\"moretag\" href=\"https:\/\/www.taxresearch.org.uk\/Blog\/2026\/01\/19\/will-a-us-treasury-sell-off-work\/\"><em> Read the full article&#8230;<\/em><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[35,75],"tags":[],"class_list":["post-89281","post","type-post","status-publish","format-standard","hentry","category-economics","category-usa"],"_links":{"self":[{"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/posts\/89281","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/comments?post=89281"}],"version-history":[{"count":2,"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/posts\/89281\/revisions"}],"predecessor-version":[{"id":89283,"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/posts\/89281\/revisions\/89283"}],"wp:attachment":[{"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/media?parent=89281"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/categories?post=89281"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/tags?post=89281"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}