Foreign investors keep buying U.S. assets despite media warnings of dollar decline

Treasury data released this one outlet indicate that foreign investors bought a net $1.75 trillion of long-term U.S. securities over the 12-month period ending in July, surpassing the $1.47 trillion recorded the previous year and more than double the $799 billion bought in the comparable period of 2024. The composition of purchases shows a move from equities to government and corporate bonds, with foreign buyers acquiring $598.1 billion of U.S. stocks and substantial amounts of corporate and agency bonds in the latest year.

At the same time, the 10-year Treasury yield rose above five percent, a signal analysts say reflects optimism about growth and corporate profits rather than anxiety over the national debt. A New York Fed review finds that the decline in the dollar’s share of foreign reserves is limited to a few large holders, chiefly China and Russia, while overall dollar allocations have barely changed. Norway’s sovereign wealth fund is merely adjusting its mix of U.S. Treasury and mortgage-backed securities, keeping dollar exposure roughly constant. The analysis concludes that foreign capital remains strongly attracted to the United States, and the dollar’s reserve-currency status stays intact.