Foreign Investors Flock to US Assets Amid Strong Demand

US Treasury Secretary Scott Bessent told lawmakers that foreign demand for US assets is strong, citing successful recent auctions and record-breaking foreign holdings of US Treasuries. The current $9.3 trillion in foreign-held debt represents about 30-32% of all publicly held debt. This influx of capital has been driven by regulatory certainty, tax policy, trade frameworks, and energy stability, according to Bessent.

The data shows that foreign investors have been pouring into US equities at an average rate of 2.8% of GDP through June 2026, outpacing bond inflows of about 2%. This trend is unusual, as stocks typically lag behind bonds in terms of foreign demand.

Bessent attributed the capital inflows to a combination of factors, including predictable policy environments and the dollar's reserve currency status. He pointed to rising volumes of dollar-denominated transactions globally as evidence that the greenback remains firmly intact.