The U.S. Treasury market has long been the bedrock of global capital flows, a fortress of liquidity and safety in an otherwise volatile world. Yet, as 2025 unfolds, the interplay between foreign demand for Treasuries and sector-specific risks is reshaping investment strategies. While recent data reveals record foreign purchases of U.S. bonds—despite a weaker dollar—the broader narrative of a “flight to safety” masks emerging structural shifts. These shifts carry profound implications for the financial and construction sectors, demanding a recalibration of asset allocation and risk management.
The Paradox of a Weaker Dollar and Stronger Demand
In Q2 2025, foreign investors poured $150.8 billion into U.S. long-term Treasuries, with private investors accounting for $154.6 billion of that total. This surge occurred even as the dollar depreciated 5.6% against major currencies. The paradox lies in the dollar’s dual role: as a…
