The ownership breakdown of the US federal debt, which hit a record $35.8 trillion recently, paints a diverse picture:

Government Funds (33%): A significant portion, roughly $11.5 trillion, is held by US government entities like Social Security and the Federal Reserve. This “intragovernmental” holding represents funds set aside for future obligations, acting as a backstop to domestic programs.

Foreign Holders (26%): Foreign governments and international investors, primarily Japan and China, own $9.2 trillion. This foreign investment in US debt underscores the dollar’s status as a global reserve currency, supporting demand for US Treasuries worldwide.

Mutual Funds and Individuals (14% + 9%): Mutual funds manage about $4.9 trillion in Treasuries, catering to a wide base of investors. Another $3.1 trillion is directly held by individuals, often as safe, long-term investments.

Banks and Pension Funds (6% + 6%): Banks hold around $2.2 trillion, while pension funds possess $2.0 trillion, using these assets to secure returns for future liabilities.

As US debt escalates toward $40 trillion, these debt ownership dynamics illustrate the substantial domestic and global reliance on US Treasuries as a stable, albeit growing, financial instrument.