Are countries selling treasuries now? Or how are they securing dollars?

Yes, they are actively selling off their Treasuries right now, and the data proves it.

The U.S. Treasury Department just released its Treasury International Capital (TIC) report in mid-May 2026 (which tracks global bond flows through March 2026). The data confirms that the global sell-off is fully underway as nations scramble to secure US Dollars to cover soaring oil import bills and defend their local currencies.

Here is exactly what the latest data reveals about how countries are behaving right now:

1. The Great Sell-Off (Outright Liquidation)

Foreign central banks are dumping their U.S. government debt at a rapid pace. According to the May 2026 TIC data release:

• The Total Drop: Total foreign-owned U.S. Treasuries fell by 1.5% in a single month, dropping to $9.348 trillion.
• Japan (The Largest Holder): Japan liquidated heavily to defend the plummeting Yen and pay for energy, reducing its Treasury holdings by nearly 4% down to $1.192 trillion.
• China: China aggressively cut its exposure by 6%, bringing its holdings down to $652.3 billion—the absolute lowest level China has held since 2008.

This massive wave of selling is a primary reason why the U.S. 10-year Treasury yield is currently hovering around 4.6% as of late May 2026, keeping U.S. borrowing costs painfully high.

2. Utilizing the Fed's Behind-the-Scenes Tools

Because outright selling drives up U.S. interest rates, allied nations are aggressively tapping into the Federal Reserve's emergency liquidity tools to secure dollars without having to sell their bonds on the open market.

• Dollar Swap Lines: The European Central Bank, the Bank of Japan, and the Bank of England are heavily utilizing the Fed's currency swap lines. They are temporarily trading their own currencies (Euros, Yen, Pounds) directly with the Fed for U.S. Dollars, which they then funnel to their domestic energy importers to pay for oil.
• FIMA Repo Facility: Dozens of smaller central banks are using this facility to pledge their U.S. Treasuries to the Fed as collateral in exchange for an overnight cash loan of U.S. Dollars. They get the cash they need immediately, and the bonds never hit the open market, sparing the U.S. yield curve from even further damage.

3. Draining Cash Deposits

Before selling bonds or borrowing from the Fed, countries are burning through the easiest source of dollars: their electronic cash deposits. Nations are drawing down the actual cash balances they hold at foreign commercial banks or the Bank for International Settlements (BIS). Once these pure cash buffers evaporate, they are forced to escalate to liquidating their bonds.

In short, the global financial system is currently burning through its safety buffers. While the Fed's swap lines and repo facilities are absorbing a massive amount of the stress behind closed doors, the outright selling by major powers like Japan and China shows that the geopolitical shock is successfully forcing global reserves into the open market.