Foreigners bought $132 billion of US securities in May, TIC data shows

Foreign investors bought a net $132 billion of U.S. securities in May, the Treasury Department said, as private inflows of $172 billion overwhelmed selling by official foreign accounts.

Foreign investors bought a net $132 billion of U.S. securities in May, the Treasury Department said Tuesday, as private inflows more than offset divestment by official foreign accounts.

The Treasury International Capital report showed net foreign private inflows of $172 billion in May, while official foreign accounts — including central banks and sovereign wealth funds — sold a net $39.9 billion. Foreign residents increased holdings of long-term U.S. securities by a net $262.8 billion during the month.

The data come as U.S. Treasuries rallied after consumer price data came in below forecasts, pushing the two-year yield down 14 basis points to 4.14 percent in its biggest single-day decline since February. The combination of strong foreign demand for U.S. assets and cooling inflation supports the case for the Federal Reserve to hold rates steady at its next meeting.

The sustained appetite for U.S. securities from private foreign investors shows the dollar's continued dominance in global capital markets. With the next TIC report scheduled for Aug. 17, analysts will watch for any shift in buying patterns as the Fed's policy path becomes clearer. If foreign demand remains strong, it could help keep U.S. borrowing costs lower than they would otherwise be, providing a tailwind for both Treasuries and risk assets.

This article is for informational purposes only and does not constitute investment advice.