Skip to main content
The FRED® Blog

Posts tagged with: "FDHBFRBN"

View this series on FRED

Who’s buying Treasuries?

Domestic vs. foreign ownernship of U.S. federal debt

As long as a government runs deficits, it has to find buyers for its bonds. In the years after the Great Recession, the Federal Reserve was a willing buyer of U.S. Treasury bonds. Since 2014, though, the Fed has put its buying spree on hold. So, somebody else must be taking up the slack. But who? The graph above addresses this question. Contrary to some reports, foreigners are not soaking up federal government debt. It seems to be domestic private investors, given that their holdings have continued increasing, while foreigners’ holdings have not. In terms of shares, as shown in the graph below, this becomes even clearer. It looks like the ownership of federal debt is actually shifting away from foreign investors toward domestic investors. (Take a look back at this FRED Blog post from May 2014.)

 

How these graphs were created: For the first, search for “federal debt held,” check the three series, and click on “Add to Graph.” For the second, start with the first: From the “Edit Graph” menu, open the panel for the line with the debt held by private investors, add to it the series with foreign debt holders, apply formula a-b, and restrict the dates to the past ten years. Finally, from the “Format Graph” tab, select graph type “Area” with stacking “Percent.”

Suggested by Christian Zimmermann.

View on FRED, series used in this post: FDHBFIN, FDHBFRBN, FDHBPIN

The depth and breadth of the federal debt

Who holds the federal debt? The pie chart above shows the shares for the last available period:

  • 27.1% is held by the U.S. government, its agencies, and its trusts—such as the social security trust.
  • 42.1% is held by private individuals and entities in the U.S., which includes 14.2% held by the Federal Reserve. (This 69.2% held domestically is technically debt between Americans.)
  • 30.9% is held outside the U.S.

How have these shares evolved over time? The graph below answers this question after removing the inter-agency debt. The Fed’s share of federal debt hasn’t changed much over time. But foreign ownership of debt has: It ramped up in the 1990s and 2000s and has been declining slightly over the past decade.

The last graph shows how these shares translate to a proportion of GDP: The value of debt owed abroad is about a third of annual GDP. The value of debt owed to domestic households and businesses is about a quarter of GDP. For recent years, the lines don’t stack above 100% of GDP, as is often mentioned when talking about the federal debt. The value of debt rises above 100% of GDP only if you include inter-agency debt. And if you also exclude debt held by the Federal Reserve, U.S. federal debt currently amounts to 62% of GDP.

How these graphs were created: For the first graph: Choose the series “Federal Debt Held by Federal Reserve Banks” and “Federal Debt Held by Foreign & International Investors.” Now, to create the series that shows only private domestic holders of federal debt, select “Federal Debt Held by Private Investors” and then use “Add Line” / “Customize data” to include “Federal Debt Held by Foreign & International Investors.” Apply the data transformation a-b. Finally, add a new line after searching for “Federal Debt held by Agencies and Trusts” and divide it by 1000 because it is in different units. Then select graph type “Pie,” which will default to the last observation. For the second graph, go back to the “Edit Graph” format tab and change the graph type to “Area” and stacking to “Percent.” Remove the last series, as it has a shorter sample and makes the percentages jump. Expand the sample period to maximum. For the last graph, use the second graph, but change the stacking to “Normal” and add to each line nominal GDP (make sure not to take real GDP): Divide each line by that series and multiply it by 100 to express it in percentages.

Suggested by Christian Zimmermann.

View on FRED, series used in this post: FDHBATN, FDHBFIN, FDHBFRBN, FDHBPIN, GDP

Who holds federal debt?

Yes. You’re seeing it right: FRED now features pie charts! This chart shows who holds federal debt, which excludes federal debt held within the federal government itself but includes debt held by local and state governments and public entities. Close to half is held by foreign investors, about a fifth by the Federal Reserve, and the rest by domestic investors. Unfortunately, the Treasury doesn’t specifically provide the amount of debt held by private domestic investors alone, so that has to be calculated, as shown here.

How this graph was created: Choose the series “Federal Debt Held by Federal Reserve Banks” and “Federal Debt Held by Foreign & International Investors.” Now, to create the series that shows only private domestic holders of federal debt, select “Federal Debt Held by Private Investors” and then use “Add data series, modify existing series” to include “Federal Debt Held by Foreign & International Investors.” Apply the data transformation a-b and then select graph type “pie,” which will default to the last observation.

Also: To see how the debt holdings have evolved, click on “customize” below the graph and change the graph settings to graph type “line,” “area” or “bar,” and then expand the date range. Set stacking to “percent” to see how the relative shares have evolved.

Suggested by Christian Zimmermann

View on FRED, series used in this post: FDHBFIN, FDHBFRBN, FDHBPIN


Subscribe to the FRED newsletter


Follow us

Back to Top