Ex-IMF Official Warns US Bond Market Flashing ‘Troubling Signs’ As China Reportedly Urges Banks To Limit Exposure to Treasuries

A former senior official from the International Monetary Fund (IMF) is sounding the alarm on US Treasuries amid reports that China is advising its banks to reduce their holdings of US government debt.

Desmond Lachman, a former deputy director at the IMF, has pointed out concerning signs in the US treasuries market. He notes that despite historical trends where long-term treasury bond yields typically fall when the Federal Reserve cuts rates, this hasn’t been the case recently. Lachman also highlights the US government’s shift towards short-term borrowing, which should have lowered long-term yields, but hasn’t had the expected effect.

Lachman emphasizes that foreign investors, who hold around 30% of the $30 trillion in outstanding US Treasury bonds, seem to be losing interest in US government debt. He warns that the failure to address the country’s public finances could lead to a crisis in the US government bond and dollar markets.

This warning comes as Chinese officials reportedly urge banks in China to limit their purchases of US treasuries. According to a Bloomberg report, Chinese banks held approximately $298 billion in US dollar bonds as of September 2025.

It is evident that the concerns raised by Lachman and the actions taken by Chinese officials could have significant implications for the US treasury market and the global economy. Stay updated on the latest developments by following us on X, Facebook, and Telegram. Subscribe to receive email alerts and check out the price action on The Daily Hodl Mix.

Remember, it is crucial to monitor the market volatility and be prepared for any potential shifts in the US government bond and dollar markets. Stay informed and stay ahead of the curve.

Image Credit: Midjourney.