Foreign Holdings of Federal Debt

This report presents current data on foreign ownership of U.S. Treasury securities, including major holders of federal debt by country. Federal debt represents the accumulated balance of borrowing by the federal government. The gross debt is composed of debt held by the public and intragovernmental debt held by federal trust funds. To finance the publicly held debt, U.S. Treasury securities are sold to investors in the United States and abroad. Treasury securities may be purchased directly from the Treasury or on the secondary market by individual private investors; the Federal Reserve; financial institutions in the United States or overseas; and foreign, state, or local governments. As of December 2025, foreign holdings of federal debt totaled approximately $9.2 trillion, or 31% of total U.S. publicly held debt ($30.1 trillion). (Figures are rounded.) After staying relatively flat in dollar terms for several years, overall foreign holdings increased in 2019-2021, fell in 2022, then jumped in 2023-2025. Because the total debt has increased faster than the debt held by foreigners, the share of federal debt held by foreigners has declined in recent years: It was 31% in December 2025. Interest on the debt paid to foreigners in 2025 was $282.4 billion. Foreign holdings can be divided into official (governmental) and private sources: 41.9% ($3.9 trillion) of foreign holdings in U.S. federal debt are held by governmental sources, and the other 58.1% ($5.4 trillion) are held by private investors. Including governments and private investors, the top three estimated foreign holders of federal debt, by country, are Japan ($1.2 trillion), the United Kingdom ($0.9 trillion), and China ($0.7 trillion) as of December 2025. Based on these estimates, Japan holds approximately 12.8% of all foreign investment in U.S. publicly held federal debt, the United Kingdom holds approximately 9.3%, and China holds approximately 7.4%. From an economic perspective, foreign holdings of federal debt can be viewed in the broader context of U.S. savings, investment, and borrowing from abroad. For decades, the United States has saved less than it invests. Domestic saving is composed of saving by U.S. households, businesses, and governments. By accounting identity (the formulas and definitions used to produce official economic statistics), when the government runs budget deficits, it reduces domestic saving. By the same accounting identity, the shortfall between U.S. saving and physical investment is met by borrowing from abroad. To be a net borrower from abroad, the United States must run a trade deficit (i.e., it must buy more imports from foreigners than it sells in exports to foreigners). Borrowing from abroad has occurred through foreign purchases of both U.S. government and U.S. private securities and other assets. As a result of foreign purchases of Treasury securities, the federal government must send U.S. income abroad to foreigners—for example, in the form of interest. If the overall economy is larger as a result of federal borrowing (because the borrowing stimulated economic recovery or was used to productively add to the U.S. capital stock, for example), then this outcome may leave the United States better off overall on net despite the transfer of income abroad. In other words, without foreign borrowing, U.S. income would be lower than it currently is net of foreign interest payments in this scenario.