U.S. Treasury reports $199.8 billion TIC inflow for August

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U.S. Treasury August TIC inflow

Highlights

August net TIC inflow totaled $199.8 billion, with $178.5 billion from private and $21.3 billion from official foreign sources, per U.S. Treasury data.
Foreign residents made net long-term U.S. securities purchases of $300.7 billion in August, while U.S. residents bought $21.6 billion in long-term foreign securities.
Short-term dollar-denominated U.S. securities held by foreigners fell $37.8 billion, and banks' net dollar liabilities to foreigners dropped $41.6 billion in August.

August securities flows and Treasury data

As reported by the U.S. Department of the Treasury, August Treasury International Capital data show a net TIC inflow of $199.8 billion, made up of $178.5 billion in net private inflows and $21.3 billion in net official inflows. The next release, covering September 2026 data, is scheduled for November 18, 2026.

Foreign residents increased their holdings of long-term U.S. securities in August, with net purchases totaling $300.7 billion. Private foreign investors accounted for $257.8 billion of those purchases, while foreign official institutions bought a net $42.9 billion.

U.S. residents also increased their holdings of long-term foreign securities, recording net purchases of $21.6 billion. After adjustments, including estimated foreign portfolio acquisitions of U.S. stocks through stock swaps, overall net foreign purchases of long-term securities are estimated at $279.2 billion for the month.

Short-term moves and market interpretation

Short-term and banking flows partially offset the strength in long-term demand. Foreign residents reduced their holdings of U.S. Treasury bills by $47.8 billion, while holdings of all dollar-denominated short-term U.S. securities and other custody liabilities fell by $37.8 billion.

Banks' own net dollar-denominated liabilities to foreign residents also decreased by $41.6 billion in August. Even so, the overall data indicate continued foreign demand for U.S. financial assets, led by private investors' purchases of long-term securities.

The Treasury says TIC data provide a window into foreign ownership of U.S. securities but do not capture holdings with complete precision, particularly when assets are held through custodial accounts in third countries or managed through foreign portfolio structures. The dataset also does not include direct investment flows, which are collected separately by the Bureau of Economic Analysis.

In our earlier article on rising U.S. Treasury yields and the widening deficit outlook, we explained how long-term borrowing costs above 5% are tightening financial conditions by lifting mortgage rates and increasing federal interest expenses. We also noted that with deficits nearing $2 trillion and political gridlock limiting the odds of near-term fiscal fixes, investors are demanding more compensation to absorb heavy Treasury issuance even as demand for U.S. government bonds remains resilient.

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