Around 2014, however, something began to turn. Foreign government purchases of U.S. debt began to stagnate. Even though foreign purchases of Treasurys eventually picked up in absolute terms in 2018, they didn’t remotely keep up with the expanding scale of the U.S. debt.

In short, foreigners, who had long supported America’s largesse by eagerly buying its debt, were buying less and less of our new debt issuance. Foreign ownership of U.S. debt declined from 34% in 2015 to 24% at the end of 2021. China’s ownership declined from $1.25 trillion in 2015 to under $1.1 trillion in 2021. To compensate for this diminishing outside interest, the U.S. looked inward for new creditors. The Federal Reserve held around 4% of U.S. debt in 2009; that figure has climbed to 19% today.