Barclays reports shift in US Treasuries buyer base drives yields to multi-decade highs

The people buying US government debt have changed, and they’re pickier about what they’ll accept in return. Barclays strategists say this fundamental reshuffling of who holds Treasuries is the primary force behind 30-year yields climbing to levels not seen in decades. In a report published on August 11, Barclays strategists Demi Hu and Anshul Pradan laid out a structural argument that goes beyond the usual inflation-and-Fed narrative. The core thesis: the Treasury market’s buyer base has flipped from institutions that didn’t care much about price to investors who care a great deal. The old guard steps back For years, the biggest buyers of US Treasuries were what strategists call “price-insensitive” participants. The Federal Reserve, hoovering up bonds through quantitative easing. Foreign central banks, parking reserves in dollar-denominated assets because that’s what reserve managers do. Neither group was shopping for bargains. They bought because they had to, not because the yield was attractive. That era is fading. The Fed has been unwinding its balance sheet, reversing the massive bond purchases that defined the post-2008 and post-2020 monetary policy playbooks. Foreign official...