Norway’s sovereign wealth fund, the world’s largest, proposes cutting US Treasury holdings by nearly $80 billion

Trust in debt obligations is the foundation on which the entire global financial system rests. When even the most conservative investors begin to reconsider their positions, it is a signal that goes far beyond one country. The growth of US debt forces us to ask where the line between stimulus and sustainability lies—and who will be the first to pay for crossing it.

The world’s largest sovereign wealth fund, Norway’s Government Pension Fund Global, has proposed cutting its US Treasury holdings by nearly $80 billion amid growing global concerns over the rapid rise of American debt. Norges Bank Investment Management (NBIM), which manages the fund, sent a letter to Norway’s Ministry of Finance on September 4 proposing to reduce the share of government bonds in the fund’s portfolio from 70% to 50%, with US Treasuries among the main targets for reduction.

According to reports, the fund currently holds about $215 billion in US Treasuries. Under the proposal, the share of US debt in the portfolio would be cut from 34.1% to 21.9%. The fund’s total assets are about $2.34 trillion.

The proposed reduction comes as other major economies also scale back their US Treasury positions. According to the latest US Treasury data, Japan and the UK sold $26.4 billion and $8.7 billion worth of bonds respectively in June. Turkey effectively liquidated all its US bonds in March, while the Dutch ABP, one of Europe’s largest pension funds, reduced its US bond exposure in the first quarter of this year.

These sell-offs reflect growing concern about America’s fiscal trajectory. In August, total US government debt exceeded $40 trillion for the first time in history, nearly $10 trillion more than the country’s GDP last year. To ease pressure on the bond market, the US Treasury recently launched a long-term bond buyback program aimed at stabilizing yields. However, market analysts say the move does little to address the underlying debt problem and may even further undermine long-term confidence among foreign investors.

“New debt is being piled on top of existing debt. And there is no sign that the US government plans to reduce its budget deficit. This means US government debt will continue to grow. At some point, the situation will become unsustainable,” said Fabian Lindner, professor of international economics at the Berlin University of Applied Sciences in Engineering and Economics.

As reported by CCTV+, the proposal by the world’s largest sovereign fund reflects growing concern among global investors about the sustainability of US debt. While the US Treasury tries to stabilize the market through bond buybacks, the fundamental problem—rising debt and budget deficits—remains unresolved. If the trend continues, portfolio revisions by major funds may become not a one-off step but the beginning of a broader reassessment of risks in the global financial system.