Central Banks Sell Record Sums of US DebtSubmitted by emalvini on Fri, 06/28/2013 - 20:18
Central Banks Sell Record Sums of US Debt
Last updated: June 28, 2013 4:35 pm
By Robin Wigglesworth in London, Michael Mackenzie in New York and Josh Noble in Hong Kong
Central banks sold a record amount of US Treasury debt last week while bond funds suffered the biggest ever investor withdrawals as markets shuddered at the prospect of the US Federal Reserve ending its quantitative easing programme.
Holdings of US Treasuries held at the Fed on behalf of official foreign institutions dropped a record $32.4bn to $2.93tn, eclipsing the prior mark of $24bn in August 2007. It was the third week of outflows in the past four.
Private investors are also dumping fixed income. Bond funds tracked by EPFR Global, a data provider, saw total redemptions of $23.3bn in the week to June 26. US funds were the worst hit, with withdrawals totalling $10.6bn, but emerging market debt funds also saw record redemptions of $5.6bn.