Global bond investors shift away from US Treasuries to overseas markets

Global investors are moving money away from US government bonds and buying bonds from Australia, the UK, and Europe instead. Schroders, a fund manager that controls $1.1 trillion in assets, has taken short positions on US five- and ten-year Treasury bonds. This means the firm expects their value to fall. At the same time, Schroders is buying shorter-term bonds in those overseas markets because it expects their yields to drop. Investors are worried that the US Federal Reserve is unclear about how it will fight inflation. Foreign private investors held $6.68 trillion in US Treasury bonds in November. However, foreign central banks now hold their smallest share since 2011, with private buyers responsible for most recent purchases.