US Treasuries came under fresh attack again on Tuesday, May 19, 2026, as foreign investors continued to walk away from American government debt.

Anxiety explodes over US debt, 30-year Treasury yield at record since 2007

At a moment when even European Central Bank President Christine Lagarde has admitted she is worried about what is happening on the global bond market, US government bonds are being offloaded at a pace that has pushed the 30-year yield to 5.181% — the highest reading in nearly 19 years, since July 2007.

Selling pressure has also hit the 10-year Treasury, whose yield climbed to 4.659%, the highest since January 2025, while the 2-year yield — more sensitive to expectations on Federal Reserve policy rates — advanced to 4.10%.

The wave of disposals is bleeding into the euro area too. Yields on Italian BTPs and Spanish Bonos rose 4 basis points to 3.95% and 3.61% respectively, while German Bund yields added 3 basis points to 3.18%.

Weighing on Treasuries — alongside the persistent fear that US inflation is set to accelerate further on the back of war-driven energy costs — is the hard evidence of an ongoing flight from American debt, a development that has clearly chilled Donald Trump’s White House.

A loud slap to Trump’s bonds from China and Japan

Data released by the US Treasury Department revealed that, during the month of March, some of the largest holders of American sovereign debt decided to drop Treasuries.

The trigger: the US–Iran war, which has forced several central banks to liquidate their dollar reserves to defend their local currencies, hit hard by the energy shock unleashed by the Middle East conflict.

The biggest seller of Trump’s bonds was China, which trimmed its Treasury holdings by roughly 6% compared with February, down to $652.3 billion.

As a result, the share of US debt held by Beijing has collapsed to its lowest level since September 2008.

A significant seller of American debt was also Japan, the single largest foreign holder of US Treasuries.

Tokyo offloaded $47 billion in Treasuries, bringing its total holdings down to $1.191 trillion.

But China and Japan were certainly not alone in selling US bonds.

The same Treasury data showed that the total amount of US Treasuries held by foreign investors fell in March to $9.25 trillion, down from $9.49 trillion in February.

Why central banks are dumping American debt

The sell-off is explained by the fallout of the oil shock, which in March hammered in particular the Japanese yen and other Asian currencies.

Japan and other regional economies — heavily dependent on oil imports from the Persian Gulf — found themselves facing an unprecedented shock, the largest in decades.

Central banks therefore moved to ringfence their local currencies, drawing down part of the dollar-denominated assets in their reserves to fund foreign-exchange interventions.

No surprise, according to Frederic Neumann, chief Asia economist at HSBC, who commented on the phenomenon by stressing that «given the increase in financial volatility since the start of the Gulf war, and the resulting pressure on exchange rates, especially in Asia, it is no surprise that central-bank investments in US Treasuries have declined».

This is because, he added, «forex-market interventions aimed at supporting local currencies will have led some central banks to sell off a slice of their US Treasury investments».

Editor’s note

This article was originally published in Italian on money.it by Laura Naka Antonelli on May 19, 2026 as «Fuga dai bond USA, rendimenti 30 anni a record dal 2007. Schiaffo sonoro a Trump da Cina e Giappone». It has been translated and adapted for an international audience by the Money.it International desk.