// reference guide
How to Read TIC Data: who really finances U.S. debt
A reference guide to Treasury International Capital data: what monthly flows and the Major Foreign Holders table measure, why Japan ranks ahead of the UK and China, and above all the custody bias that assigns Treasuries to the custodian country rather than the true owner. Belgium, Luxembourg, the Caymans, undercounted basis-trade hedge funds and the declining official share: what the data shows and distorts.
The question returns at every Treasury auction and every yield spike: if foreigners step back from U.S. debt, who buys, and at what yield? The reference source is the Treasury International Capital system. It tells how many Treasuries non-residents hold and where they are recorded. But it speaks in a language that must be learned: custody accounting, where Belgium can matter more than Saudi Arabia and a Cayman hedge fund can disappear into a domestic line.
What TIC measures
Treasury International Capital is the set of reports maintained by the U.S. Treasury, with the New York Fed as agent, tracking portfolio capital movements between U.S. residents and non-residents. Two pieces matter for U.S. debt: monthly net purchases and sales of long-term U.S. securities by foreigners, and holdings data, especially the Major Foreign Holders table for Treasuries.
At the end of 2025 non-residents held roughly $9.27 trillion of Treasuries, with early-2026 totals above $9.4 trillion. That is huge, but it is around 30% of marketable debt, a share that has drifted down over time as domestic ownership has grown. Foreigners matter; they are not the whole marginal buyer.
The top line is familiar: Japan around $1.19 trillion, the United Kingdom around $866 billion, China around $684 billion. But the rest of the ranking is a warning: Belgium, Luxembourg, the Cayman Islands, Ireland. These are custody and fund-domicile centers as much as final investors.
Custody bias: the core problem
The Treasury says it explicitly: the monthly table is collected on a custody basis and cannot assign ownership with perfect accuracy. A Treasury bought by an investor in one country but held through a custodian in another is attributed to the custodian’s country.
Belgium is large because Euroclear is there. Luxembourg and Ireland are large because investment funds are registered there. The UK is inflated by London’s custody role. The Cayman Islands line captures hedge funds, including vehicles involved in the Treasury basis trade.
That last point matters for stability. Fed research has estimated that Cayman hedge-fund Treasury positions were undercounted by about $1.4 trillion at the end of 2024, with some exposure classified as domestic. Read naïvely, TIC can turn a leveraged arbitrage into “American savings.”
Holdings, flows and price effects
Do not mix stock and flow. The holdings table gives a market-value stock at a date. Monthly flows show net purchases and sales. The two can diverge sharply because Treasury holdings are valued at market prices. If yields rise, bond prices fall and a country’s reported holdings can decline even if it sold nothing.
That is why headlines about a country “dumping Treasuries” often misread valuation effects. To judge appetite, compare the change in holdings with net monthly flows. In early 2026, monthly TIC inflows reached $184.5 billion in February and $150.7 billion in March, while October 2025 had shown a negative balance around -$37.3 billion. Flows, not just stocks, tell the demand story.
China, the UK and the shift away from official buyers
Over the long run the data tells two stories. The first is China’s decline. China held more than $1.3 trillion of Treasuries in the mid-2010s and was below $700 billion at the end of 2025. Some Chinese holdings are booked elsewhere, but the direction is real.
The second is the rise of custody centers and private buyers. The share of foreign holdings owned by official institutions, central banks and sovereign funds, has fallen from above 53% at the end of 2021 to roughly 42% at the end of 2025, even as total foreign holdings hit records. The marginal foreign holder is increasingly a private investor sensitive to yield, not a central bank mechanically accumulating reserves. That changes the nature of external financing.
How to read TIC in practice
The useful sequence is simple. Separate flows from holdings. Correct mentally for custody centers: Belgium, Luxembourg, Ireland, the Caymans and part of the UK are not straightforward national demand. Beware of valuation effects when yields move. Use the annual benchmark survey to refine true owner nationality, because monthly data is a fast but distorted map.
TIC should be read with the domestic side of debt ownership: the Fed balance sheet, money-market funds, banks and now stablecoin issuers buying T-bills. TIC gives the foreign window; it is not the full financing map.
The lesson is broader: transparency is not legibility. TIC gives precise numbers, but arranged according to the grammar of custody. Read well, it is one of the best windows on U.S. external financing. Read badly, it makes Belgium speak for Beijing and hides leverage inside a country label.
Main sources: U.S. Treasury, Treasury International Capital system; Treasury Major Foreign Holders table; Treasury TIC monthly releases; Congressional Research Service, Foreign Holdings of Federal Debt; Wolf Street analysis of foreign Treasury holders and basis-trade undercounting.
This guide is not investment advice.
// cite this guide
l0g, “How to Read TIC Data: who really finances U.S. debt”, l0g.fr, published June 30, 2026, updated June 30, 2026, https://l0g.fr/en/guides/read-tic-data-us-debt/
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