US bond holdings fall by $76bn in a week: they don’t want bonds, they want cash

dollar rally

Intermoney | First Citizens finally proceeded to buy SVB for $500 million, assuming $56 billion in deposits and $72 billion in loans. The estimated cost of SVB’s bankruptcy has been set at $20 billion, a loss borne by the FDIC and representing 15% of the fund’s total. Not surprisingly, just a year ago, SVB was worth $40 billion and was the 14th largest bank in the US. Just a month ago, First Citizens was half the size of SVB. There is speculation that the authorities may be considering extending an emergency credit line for US banks, thus giving First Republic, which is also struggling, more time to shore up its balance sheet.

Notably, UST’s foreign holdings fell by $76 billion in the week to 22 March, the largest weekly decline in US debt since 2014, as central banks increased their USD requirements, swapping US bonds for cash.

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