Goldman Sachs reported that foreign institutions sold U.S. Treasuries in March 2026 as the dollar strengthened more than 2% during the US-Iran conflict. The selling included institutions from China and Japan, according to the bank's analysis. The report offers a rare direct look at how foreign investors reacted to the dollar's rally amid escalating tensions.
What the report found
The report from Goldman Sachs details a pullback by foreign holders of U.S. government debt during a period of heightened geopolitical risk. The dollar's rise, which often attracts safe-haven flows, appears to have prompted some investors to reduce their Treasury holdings. The bank did not disclose the total volume of the sell-off or the specific institutions involved beyond noting their countries of origin. It also did not specify whether the sales were concentrated in short-term bills or longer-dated bonds.
Why the dollar surged
The US-Iran conflict in March 2026 drove the dollar up by over 2% against a basket of major currencies. Such a move is typical during geopolitical crises, as investors seek the relative safety of the dollar. But a stronger dollar can also make U.S. assets more expensive for foreign buyers and reduce the value of their overseas returns when converted back to local currencies. The report suggests that some foreign institutions chose to sell Treasuries rather than hold onto them as the currency appreciated.
Who sold and why it matters
Institutions from China and Japan were among the sellers, the report said. Both countries are traditionally among the largest foreign holders of U.S. Treasuries, though the report does not specify whether the selling came from central banks or private investors. The timing of the sales — during a period of rising tensions between the U.S. and Iran — adds a geopolitical dimension to the flows. Large-scale selling by official holders in the past has drawn attention from policymakers, but the report gives no indication that the March sales were disruptive.
What the selling means for the market
Foreign demand for U.S. Treasuries is a key factor in keeping borrowing costs low for the U.S. government. A sustained sell-off by foreign institutions can put upward pressure on yields. However, the Goldman Sachs report does not estimate the impact of the March sales on Treasury prices or yields. It simply notes that the selling occurred as the dollar rallied. The findings add to the data on how geopolitical events influence cross-border capital flows.
The bank did not release additional details on the exact timing of the sales or whether the selling continued after the initial dollar surge. Investors are watching for further commentary from Goldman Sachs and other financial institutions as they assess foreign demand ahead of upcoming Treasury auctions.
