Foreign governments keep buying U.S. debt

The Treasury Department reported Monday that foreign governments have increased their holdings of U.S. debt to $5.66 trillion as of February. That is a $12 billion increase from $5.54 trillion in January.

In total, U.S. debt stands at more than $16 trillion.

China remains the top foreign holder of U.S. debt with $1.222 trillion in holdings. It increased its holdings by $8 billion in February. Japan remains number two, with $1.097 trillion. That is a decrease of $6 billion in February.

While conservatives warn that the U.S. budget deficit is unsustainable in the long-run, there is yet to be any sign that Treasury is having difficulty in selling U.S. bonds.

Investor appetite could change this summer as Congress and the White House once again tangle over raising the debt ceiling. The House in the coming weeks plans to move a bill that would prioritize bond payments if the debt ceiling is hit and Treasury is forced to start defaulting on its obligations.

Under a January compromise, the debt ceiling was suspended until May 19. Treasury should be able to take extraordinary measures until about August to ward off a default.

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