demand from foreign investors for treasurys and other longterm us bonds dropped by more than half to 80 billion in september from a month before according to a barclays tally of treasury department data while foreign investors bought nearly 190 billion in longer us fixedincome securities in august they scaled back dramatically a month later see chart according to treasury department data the chart above also shows foreign investors have long focused on treasury bonds and notes as a main source of us fixed income while “agency” or governmentguaranteed mortgagebacked securities and corporate bonds have represented smaller areas of focus while barclays analysts still pegged foreign holdings at 11 trillion of longterm us fixedincome securities they also attributed the drop in purchases in september to continued signs of central banks selling reserves for interventional purposes “indeed official sector transactions in us treasury bonds and notes show 38bn of net sales in september compared to average net sales of 6bn and 16bn over the prior three and six months respectively” the barclays research team led by samuel earl wrote yields on treasury bonds and other forms of us fixed income have shot up this year as the federal reserve has sharply increased its policy rate to fight high inflation the 10year treasury rate tmubmusd10y was at 3774 thursday after seeing its biggest oneday yield jump since oct 20 based on 3 pm eastern levels according to dow jones market data bond yields and prices move in the opposite direction stocks closed lower for a second day in a row on thursday after st louis fed president james bullard indicated that a “sufficiently restrictive zone” for the fed funds policy rate may sit in a range of 5 to 7 up from 375 to 4 currently a higher policy rate would further tighten financial conditions for households and businesses and potentially risk a us economic recession the dow jones industrial average djia shed about 7 points or less than 01 to close at 33546 while the sp 500 index spx ended 03 lower and the nasdaq composite index comp booked a 03 decline it was the first backtoback losses for the three equity benchmarks in two weeks according to factset data