JPMorgan warns: the BRICS push for de-dollarization puts pressure on US Treasuries
JPMorgan warns: the growing currency diversification, also fueled by the initiatives of the BRICS countries, is reducing foreign demand for US Treasury securities.
The result, if the trend continues, could be an increase in the cost of debt and greater volatility in the bond market.
According to data collected by JPMorgan Global Research, the share of US public debt held by foreign investors fell towards 30% by the first half of 2025, while the comparison with official data from IMF COFER shows a gradual reshaping of the dollar’s share in global reserves.
In meetings with asset managers and officials from European and Asian central banks, analysts observe that the combination of accumulations in alternative currencies and changes in official reserve policies explains much of the decline in foreign demand.
What JPMorgan Supports
According to JPMorgan’s analysis, de-dollarization is proceeding in a gradual but tangible manner.
The bank notes a retreat in the dollar’s share both in global currency reserves and in cross-border liabilities – that is, currency debts between different countries – indicating a progressive shift towards other currencies.
Insights and data are available at JPMorgan Global Research and JPMorgan Private Bank. To understand the impact of global currency diversification, also read our in-depth analysis on currency diversification and global markets.
The “30%” explained: what it really measures
The reference to “30%” concerns the share of the negotiable US public debt held by foreign investors, an estimate that, according to JPMorgan, is currently around this level.
In the past, the share was higher; the recent trend shows a gradual reduction, accompanied by greater domestic self-financing and an increasing global currency diversification. More details are provided in the analyses by JPMorgan Global Research.
Why It Matters for US Debt
If foreign demand slows, the US Treasury will likely have to offer higher yields to place the securities, thus transferring the higher cost of debt onto public accounts.
In this context, a reduced availability of foreign capital translates into heavier financial burdens and tighter fiscal margins, with ripple effects on spending and economic growth.
In September 2025, the yield on the 10-year Treasury stood around 4%–4.5%, a level that amplifies the impact of a potential increase in the term premium on public finances and the cost of credit. To delve deeper into the performance of Treasuries and their impact, visit the Treasury USA section on our site.
Independent Context: What IMF, BIS, and US Treasury Say
- IMF (COFER): the share of the dollar in official reserves remains dominant, although showing a slight erosion in the long term. Data available at IMF COFER.
- BIS: statistics on cross-border markets indicate an increasing diversification in currency liabilities. Source: Bank for International Settlements. Also read our article on the role of the BIS in global financial markets.
- Tesoro USA (TIC/SOMA): the series on foreign holders show that the foreign share of the total negotiable debt has been declining in recent years. U.S. Treasury TIC.
These independent findings corroborate the long-term outlook outlined by JPMorgan, while reflecting cyclical dynamics related to interest rates, the strength of the dollar, and global growth.
Effects on the bond market: the transmission channels
- Higher Term Premium: With less “price-insensitive” demand from foreign investors, the term premium on Treasuries tends to rise.
- Rise in 10–30 year yields: the cost of capital for businesses and households may increase.
- Greater volatility: rapid rate movements can generate spillover effects on stocks and credit.
To learn about the latest developments in the bond market and the possible implications for families and businesses, check out our Bond Markets section.
The yuan in payments: real importance and limitations
The use of the yuan in international payments is increasing, especially in Asia and along energy chains, marginally reducing the need for dollars for cross-border transactions and operational reserves.
It must be said that structural limits remain: capital controls, lower market depth, and more restricted convertibility compared to the dollar. This results in a gradual and non-linear de-dollarization process.
To delve deeper into the growing role of the yuan in global finance, see our special The yuan and de-dollarization.
Not Just Risk: Mitigation Factors
- Resilient domestic demand: pension funds, banks, and US investors can absorb a larger supply at appropriate prices.
- Monetary policy: shifts in QT/QE can impact the liquidity of Treasuries and the term premium.
- Depth and rule of law: the US market remains the most liquid and transparent, supported by legal infrastructures that strengthen investor confidence.
Market Scenarios in 2025
- Base: foreign demand remains stable or slightly decreases; yields are primarily driven by inflation and net Treasury supply.
- Adverse: a marked decline in foreign flows and a higher term premium increase volatility on long-term maturities.
- Benign: solid growth and disinflation facilitate domestic absorption, limiting pressure on rates.
Discussed Policies: Growth, Efficiency, Sustainability
Market voices, including figures like Jamie Dimon, have emphasized the need for pro-growth measures and fiscal discipline to mitigate long-term pressures: incentives for productive investments, reduction of waste and fraud, greater focus on human capital.
An interesting aspect is that these guidelines hold value as principles, not as operational prescriptions.
For a comparison with other market opinions and policy insights, see our article Jamie Dimon on economic strategies.
Indicators to Monitor in the Coming Months
- Foreign holding of Treasury (TIC).
- 10 and 30-year yields and the term premium.
- Official reserves in dollars (IMF COFER) and currency composition of flows reported by the BIS.
Essential Glossary
- Foreign exchange reserves: foreign currency assets held by central banks to stabilize their own currency and manage liquidity crises.
- Cross-border liabilities: debts contracted between entities from different countries, denominated in a specific currency.
- Spillover: contagion effects from one market sector to other financial segments.
Conclusion
The de-dollarization driven by the BRICS is underway and, although gradual, could impact the foreign demand for US Treasuries and the financing costs of the United States in 2025.
Analyses by JPMorgan, supported by official data from the IMF COFER, the BIS, and the US Treasury, suggest possible episodic pressures on yields.
Such pressures could be mitigated by the depth of the American market and the absorption capacity of domestic investors, although the final trajectory will depend on growth, inflation, and future economic policy choices.
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