According to figures released by the Treasury Department on Wednesday evening, China's holdings of U. It is the sixth straight month that China has reduced its exposure to U.

Japan passed China in October to become the largest foreign owner of U. But Japan has leaped ahead of China only by default. This is the fourth straight month that Japan has pulled back on U. So it's not accurate to say that China and Japan are unloading bonds just because of Trump. After all, Trump was still the underdog when China and Japan first started their sales. But the acceleration of the Treasury sales in November could be yet another indication that investors feel Trump's proposed stimulus policies will boost growth, which makes owning bonds less attractive.

China is no longer the biggest foreign holder of U. Keep in mind that Treasury yields go up when investors are selling bonds. And bondholders often unload U.

In times of stronger growth, bonds are less rewarding investments than stocks, which benefit more when consumers and businesses are boosting their spending. So rates should go higher if Trump's stimulus plans succeed.

Chinese Companies Pull Out of US Stock Market Amid Complaints Over Price

Yields on the benchmark Year Treasury note hit 2. But they have pulled back a bit since then and are now hovering around 2.

Chinese Companies Are Pulling Out Of The Once Desirable US Stock Markets - Business Insider

That suggests that there has been more bond buying in the past few weeks. And that makes sense, especially since the explosive stock market rally that took place late last year has started to cool off. But not all foreign governments are dumping Treasury debt. Ireland, Brazil, the U. Global central banks were dumping debt at a record pace last summer.

Will the stock crash in China take down the US economy? - The Boston Globe

It's also worth noting that China and Japan may be selling bonds because they need the cash to support their own economies. It's not all about Trump.

China in particular is trying to boost the value of its currency, the yuan, to make it more attractive in the global market.

So it has occasionally sold some of its Treasury holdings to buy the yuan. The Federal Reserve's rate hike in December -- and suggestion that several more rate hikes are coming this year and over the next few years -- should also help push bond yields up. Bill Gross, a bond fund manager at Janus, wrote in his most recent monthly outlook that yields should "inevitably move higher" in Trump's first year of office.

However, he thinks there is no guarantee that they actually will because central banks in Japan and Europe are doing all they can to keep their own interest rates low. Is the bond bubble finally about to burst? That will put pressure on U. Gross said that 2. He argues that if rates go above that level, a bond bear market will begin -- meaning that rates could shoot even higher as more investors dump U.

Much more important than Dow 20, It is the key to interest rate levels and perhaps stock price levels in ," Gross wrote. Start your day right with the latest news driving global markets, from major stock movers and key economic headlines to important events on the calendar.

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