Demand for US T-Bills Falls

The US Treasury Department announced that the demand for Treasury bills fell by $53 billion in December, easily eclipsing the previous record drop of $44.5 billion set in April, 2009. Faced with record deficits, the Treasury could be forced to offer higher yields in a bid to find sufficient buyers of its debt in order to meet the current spending gap.

The reduction in demand stems largely from moves by China to divest itself of US denominated securities. In December, China reduced its US holdings by $34.2 billion, with further cuts expected.

Source: Associated Press

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