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Scott Bessent walked into the House Financial Services Committee on September 15 with a simple message: the rest of the world wants to own American assets, and the receipts back him up.
The US Treasury Secretary told lawmakers that recent Treasury auctions ranked among the two most successful in the past two decades, a data point he framed as proof that global confidence in US financial stability isn’t just holding steady. It’s accelerating.
The numbers behind the confidence pitch
Foreign holdings of US Treasuries now sit at roughly $9.3 trillion, representing about 30-32% of all publicly held debt. That’s a staggering pile of IOUs that the rest of the world is apparently happy to keep adding to, even as the national debt itself crossed the $40 trillion threshold earlier this year.
But the bond market is only part of the story. Bessent highlighted that foreign investors have been pouring into US equities at an average rate of 2.8% of GDP through June 2026. For context, foreign inflows into Treasuries ran at about 2% over the same period. Stocks outpacing bonds in terms of foreign demand, outside of a crisis, is something that hasn’t happened consistently in decades.
The 10-year Treasury yield has climbed above 5%, its highest level since 2007. The 30-year yield pushed to 5.32%. Bessent described the US bond market as the strongest performer among developed economies under the current administration.
Why foreign capital keeps showing up
Bessent attributed the capital inflows to a combination of regulatory certainty, tax policy, trade frameworks, and energy stability. The argument is essentially that predictable policy environments attract long-term capital, and that the current mix of conditions is pulling trillions toward US markets.
The dollar itself continues to play a central role. Bessent pointed to rising volumes of dollar-denominated transactions globally as evidence that the greenback’s reserve currency status remains firmly intact. This comes despite well-documented efforts by countries like Russia and China to reduce their dollar reserves over the past several years.
What rising yields mean for markets
For bond portfolios, a 10-year yield above 5% is generous by recent historical standards, but locking in that rate only makes sense if you believe yields won’t keep climbing. And with the national debt above $40 trillion and no serious deficit reduction plan on the horizon, the supply of new Treasuries isn’t slowing down anytime soon.
Bessent’s broader point, stripped of the political packaging, is that capital flows are a revealed preference. Countries and institutions can talk about diversifying away from the US all they want. The money is moving in the opposite direction.
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