Demand for long-term U.S. bonds and other financial assets from international investors cooled to end the first quarter as short-term securities became more attractive, according to Bloomberg. On Monday, the Treasury Department reported that net purchasing of long-term equities, notes, and bonds totaled $24 billion in March from a level of $27.2 the prior month. The slowdown in long-term assets was offset by a surge of net buying of short-term securities to $116 billion from $95.6 billion in Febraruy.
The data serves as a gauge for global confidence in the U.S. economy as well as fiscal and monetary policy. Kevin Chau of IDEAglobal said, “Foreigners had a little more confidence in the recovery in March,” which prompted a shift into riskier assets and securities. China reduced its holdings by $9.2 billion to $1.145 trillion in March, while Japan increased holdings by $17.6 billion to $907.9 billion. The decline in net purchases of long-term U.S. assets was in contrast to economists’ forecast for a $6 billion increase in March.