Is China dumping U.S. Treasuries?

A steep fall in U.S. Treasury bonds has led to speculation that China may be pulling its funds from the U.S., The Telegraph said. Data from the New York Federal Reserve revealed that since late July, central banks around the world have pulled $48 billion from U.S. Treasuries, with a $32 billion fall in the last two weeks, The Telegraph reported. David Powell, an economist at New York-based IDEAglobal, called Beijing out as the culprit. In a note to clients, Mr. Powell said that the bond sales coincide with moves by Beijing to kick off a $300 billion sovereign wealth fund, according to the report. The move is part of a plan to diversify China’s reserves, which are mostly in U.S. bonds. However, a pair of advisers to the Chinese government suggested last month that Beijing should use its $900 billion U.S. Treasury holdings as a bargaining chip, The Telegraph reported. The jury is out as to who is behind the bond withdrawals until November, which is when the Treasury releases its Treasury International Capital System report.