Sovereign Treasury Holdings & Yield Simulator
Evaluate the macroeconomic consequences of sovereign foreign exchange reserve reallocations. Simulate how bilateral de-dollarization, Euroclear custodial shifts, and Treasury selloffs impact US borrowing costs and global reserve ratios.
Holdings Trajectory & Projected Yield Premium
Cumulative Proceeds Deployed
US Yield Elasticity Sensitivity Table
| Maturity Bucket | Supply Absorbed | Est. Spread Impact | Federal Interest Cost |
|---|---|---|---|
| 2-Year Note | $112.5 B | +8.4 bps | +$94.5M/yr |
| 10-Year Benchmark | $187.5 B | +18.0 bps | +$337.5M/yr |
| 30-Year Bond | $75.0 B | +24.3 bps | +$182.2M/yr |
Empirical TIC Data & Historical Context
The US Department of the Treasury's Treasury International Capital (TIC) reporting system tracks cross-border portfolio flows and custodial ownership of US government debt. In 2011–2013, China stood as the single largest foreign creditor to the United States, peaking above $1.31 trillion in Treasuries.
Over the following decade, this balance has undergone a sustained structural drawdown down to $618 billion—an 18-year low. The pace of diversification noticeably accelerated after early 2022 following the multilateral G7 reserve freezes, motivating central banks across the Global South to reassess unilateral dollar concentration risks in favor of physical gold bullion and multilateral currency clearing mechanisms.
Analytical Methodology & FAQ
How is the 10-Year Treasury yield impact calculated?
We apply an empirical duration elasticity coefficient derived from Federal Reserve Board and academic bond supply literature (notably Greenwood, Hanson, and Vayanos, 2015). When a price-insensitive sovereign buyer liquidates or fails to roll over $100 billion of 10-year equivalent duration into the private primary dealer network, private market arbitrageurs demand an additional term premium of ~3.5 to 6.5 basis points to absorb the excess duration risk.
Are Euroclear or Belgian holdings accounted for?
Yes. Many global central banks route sovereign purchases through third-party clearing houses and custodial hubs (e.g., Euroclear in Belgium or custodial banks in London and the Cayman Islands). A nominal decrease in Chinese or Middle Eastern holdings often coincides with custodial spikes in Belgium or the UK before true physical divestment takes place.
What is the limitation of this model?
This simulator models primary direct supply displacement. It assumes domestic institutional demand (US money market funds, pension funds, and asset managers) absorbs remaining supply according to linear term-premium elasticities, without dynamic feedback loops from sudden Federal Reserve Quantitative Easing (QE) interventions.