Who Is Financing the Federal Government?

From a consolidated perspective, the answer is (mostly): the federal government. But foreign demand is roaring back in 2021.

The U.S. federal government has sold about $5.4 trillion in bills, notes, and bonds since the end of 2019. Who has been on the other side? In practice: the U.S. federal government. Most of the borrowing has been effectively self-financed.

The reason is that federal deficits have facilitated a surge in household and business holdings of bank deposits, mon…