Foreign Investors Pump $132 Billion Into US Securities In May

According to data published by the US Treasury Department, global investors kept raising their holdings in US financial instruments and, in May alone, they bought US securities totaling $132 billion.

The latest figures indicate that overseas investors remained active buyers of American assets, particularly equities and corporate bonds, even as markets continued to track inflation trends and the outlook for US interest rates.

Long-Term Investment Flows Stay Robust

The Treasury's monthly Treasury International Capital (TIC) report showed that net long-term inflows into US securities touched $1.33 trillion during the 12 months ended May.

The data points to sustained foreign participation in US financial markets despite uncertainty surrounding the Federal Reserve's future policy decisions.

Foreign Investors Continue Buying US Stocks

Equities attracted the largest share of overseas investment during the month.

Foreign investors purchased $134 billion worth of US equities on a net basis in May, taking total net equity inflows over the previous 12 months to $909 billion.

The sustained purchasing indicates that investors are very much still interested in US stocks and that the US stock market is very resilient and strong.

Treasury Bills See Outflows

While demand for equities stayed firm, short-term government debt witnessed a different trend.

Foreign investors reduced their holdings of US Treasury bills by $43.5 billion during May, suggesting some investors adjusted their short-term fixed-income positions as they assessed inflation and the possible direction of Federal Reserve interest rates.

However, interest in longer-maturity government debt remained positive.

The report showed net purchases of longer-dated US Treasury securities of $56.6 billion during the month. Over the past year, cumulative foreign investment in these securities reached $290 billion.

Corporate Bonds Also Attract Buyers

Overseas investors also increased their allocation to the US corporate bond market.

Net purchases of corporate debt stood at $52.5 billion in May, while total net buying over the previous 12 months climbed to $449 billion, according to Treasury Department data.

The latest TIC report suggests that global investors continue to view US financial markets as an attractive destination for capital, with steady demand for equities and corporate bonds more than offsetting the decline in short-term Treasury bill holdings.

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