China is selling US debt: politics or risk aversion?

China is selling US debt: politics or risk aversion? Beijing is actively getting rid of US securities: from January 2022 to January 2023, China's position in US Treasuries decreased by $174.4 billion, or 17%. The question arises: where is the money?Alas, due to the rate increase, the US Treasuries price index fell by 7.7%. Taking into account the market revaluation, it turns out that over the year the volume of American debt in Chinese reserves also decreased  by about $100 billion, or 10%. And it is not a fact that all these securities were sold on the open market  some of the bonds could simply be redeemed.So ... Part of the currency was clearly used to support the yuan against the dollar and offset the record budget deficit. China has increased the amount of gold in its reserves for the year by 2.5 million ounces. With an average gold price of $1,802 per ounce, that's about $4.5 billion. On the scale of the US Treasury sell-off, China's gold investment looks meagre. Debts of other countries or other US securities: over the year, China's foreign exchange reserves decreased by $37 billion, while the volume of Treasuries decreased by $174.4 billion ($100 billion, taking into account market revaluation). A significant part of the proceeds from the sale of US Treasuries was directed to other securities  US agency bonds. Such securities are issued by government-sponsored entities such as mortgage agencies Fannie Mae and Freddie Mac. The yield of such securities is higher than that of ordinary Treasuries. Over the year, China's investment in US agency bonds increased by $55 billion (+27%).So the wording Beijing is getting rid of the dollar is at least incorrect. China is selling US government debt to reinvest in other US debt  US agency bonds. China is just diversifying its investments in different types of American papers. But against the backdrop of the Fed's policy, such diversification looks illogical and useless.And what do you think?Profits to yall!#ForexChief #FannieMae #forexnews #StopLoss #stocks #market #profit #Traders #FreddieMac #bonds