Foreigners bought $132 billion of U.S. securities in May, Treasury says

• Foreign investors bought $134 billion in U.S. equities in May, totaling $909 billion in net purchases over the past year amid a strong bull market
• Foreign holdings of U.S. Treasury bills decreased by $43.5 billion, a decline likely to draw scrutiny given market focus on inflation and Federal Reserve interest rate policy
• Net purchases of longer-term Treasury securities were $56.6 billion for the month and $290 billion over 12 months, while corporate bond purchases reached $52.5 billion in May and $449 billion annually

Summary: Foreign Investment in U.S. Securities Reaches $132 Billion in May

Key Figures:

Foreign investors purchased a net $132 billion in U.S. securities during May, according to the Treasury Department's Treasury International Capital (TIC) report released July 14. This brings total net long-term foreign purchases to $1.33 trillion over the trailing 12-month period.

Investment Breakdown:

• U.S. Equities: Foreign investors bought $134 billion in May, totaling $909 billion over the past year, reflecting strong demand amid a robust U.S. stock market rally
• Treasury Securities: Long-term Treasury purchases reached $56.6 billion for the month and $290 billion annually
• Treasury Bills: Foreign holdings decreased by $43.5 billion, a notable reduction warranting market attention
• Corporate Bonds: Overseas purchases totaled $52.5 billion in May and $449 billion over 12 months

Market Implications:

The significant reduction in Treasury bill holdings may draw scrutiny from market participants closely monitoring U.S. inflation trends and Federal Reserve monetary policy decisions on short-term interest rates. The data suggests foreign investors are favoring equities and longer-term securities over short-term government debt.

The substantial equity inflows demonstrate continued international confidence in U.S. stock markets, which have experienced strong performance. Meanwhile, sustained demand for longer-term Treasuries and corporate bonds indicates ongoing appetite for U.S. fixed-income assets despite the shift away from Treasury bills.

These capital flows underscore the U.S. market's role as a destination for global investment, with diversified interest across asset classes totaling over $1.3 trillion in annual foreign purchases.