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The structure of who lends to America is changing, and the change comes with a price.
Against the backdrop of a shifting creditor base, the US is paying a higher cost to finance its debt, drawing in investors who are notably more price-sensitive than the buyers they are replacing.
The era of the captive Treasury creditor is fading. A costlier clearing rate For years, a significant share of Treasury demand was structurally anchored.
Certain buyers, those whose mandates or cross-border reserve positions made US paper the default destination, absorbed supply without requiring the kind of yield premium that a discretionary investor would demand.
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