The Dividend Cafe Wednesday - May 28, 2025
May 28, 2025
Explore the intriguing market movements fueled by delayed tariffs on the EU. Dive into the implications of long-term sovereign debt yields, especially from Japan, and discover insights from recent Richmond Fed survey results. The discussion highlights foreign investments in US Treasury debt and the prospective economic data on Q1 GDP and jobless claims. With a focus on market sentiment and key indicators, listeners gain a clearer picture of the economic landscape.
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Market Surge From Tariff Delay
- The market surged over 740 points following a tariff delay announcement affecting the EU until July 9th.
- This caused significant breadth expansion and a 2% rise in the S&P 500, stabilizing market sentiment for now.
US Treasury Debt Ownership Breakdown
- About 75% of US Treasury debt is owned domestically, including pensions, banks, and the Federal Reserve.
- Foreign holdings, while significant, are only about 25%, affecting perceptions about foreign influence on US debt markets.
Japan's Domestic Debt Ownership
- Japan’s government debt is mostly domestically owned, with the Bank of Japan holding roughly half.
- Foreign investors own only about 5%, limiting external pressure on Japanese yields despite high debt levels.