Housing, healthcare and tuition make up a bigger and bigger share of spending for the average US household, which means relatively fewer dollars are available for discretionary spending, see chart below.
The number of births per woman has declined significantly in China, from 1.8 in 2017 to 1 today, see chart below. Also, the Chinese population has been shrinking since 2022.
The Milliman 100 Pension Funding Index tracks the funded status of the 100 largest corporate defined benefit pension plans sponsored by US public companies.
Specifically, the index monitors the financial health of corporate pension plans by comparing their total assets to their projected liabilities, and the latest reading of the funded ratio (assets divided by liabilities) shows that corporate pension plans have more than enough assets to cover future obligations, see chart below.
When the Fed started raising interest rates in early 2022, foreign private investors started buying more US Treasuries, despite the associated increase in hedging costs for foreigners, see chart below.
The bottom line is that foreign private investors like higher nominal US yields. But demand from foreign central banks and sovereign wealth funds is not sensitive to changes in yields.
