European institutions adjusting US Treasury allocations sends a signal.

The yield on the U.S. 10-year Treasury note recently broke above 5%, the highest level since 2007. As the total debt of the U.S. federal government surpassed $40 trillion in August, some European institutions have begun adjusting their allocations to U.S. Treasuries and other assets, drawing further attention to the pressures facing the U.S. Treasury market. Norges Bank Investment Management has proposed reducing the weight of government bonds in its bond investment benchmark from 70% to 50%. According to Reuters calculations, if the relevant adjustment is ultimately implemented, the fund's current U.S. Treasury holdings of about $215 billion could be reduced by nearly $80 billion, making U.S. Treasuries the single government bond category with the largest reduction in this adjustment.