# ![@Brad_Setser Avatar](https://lunarcrush.com/gi/w:26/cr:twitter::733647469305864195.png) @Brad_Setser Brad Setser

Brad Setser, a well-known economist and blogger, has been actively discussing global economic issues, particularly China's trade dynamics and the US-China relationship. The recent focus has been on China's massive trade surplus with emerging economies and its implications. Additionally, Setser has highlighted the complexities of Argentina's economic situation, including its struggles with servicing external debt and the role of the US Treasury in stabilizing the peso.

### Engagements: [------] [#](/creator/twitter::733647469305864195/interactions)
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### Social Influence

**Social category influence**
[finance](/list/finance)  #4890 [countries](/list/countries)  31.88% [currencies](/list/currencies)  #1316 [stocks](/list/stocks)  2.17% [technology brands](/list/technology-brands)  2.17% [social networks](/list/social-networks)  0.72% [financial services](/list/financial-services)  0.72% [products](/list/products)  0.72%

**Social topic influence**
[china](/topic/china) #823, [in the](/topic/in-the) 11.59%, [debt](/topic/debt) #1409, [balance sheet](/topic/balance-sheet) #663, [global](/topic/global) #949, [$100b](/topic/$100b) #56, [strong](/topic/strong) 5.07%, [taiwan](/topic/taiwan) #191, [data](/topic/data) 3.62%, [japan](/topic/japan) #2650

**Top accounts mentioned or mentioned by**
[@joequant](/creator/undefined) [@jchengwsj](/creator/undefined) [@globalcitizen_k](/creator/undefined) [@songpinganq](/creator/undefined) [@superavitfiscal](/creator/undefined) [@dampedspring](/creator/undefined) [@kellyenz](/creator/undefined) [@stevehou](/creator/undefined) [@dnikhilp](/creator/undefined) [@jerzykurtyka](/creator/undefined) [@vkmacro](/creator/undefined) [@lordpos3idon](/creator/undefined) [@gloeschi](/creator/undefined) [@exurbandmv](/creator/undefined) [@maxpoweeeeer](/creator/undefined) [@halobrief](/creator/undefined) [@globalcitizenk](/creator/undefined) [@augustuskaizer](/creator/undefined) [@vshih2](/creator/undefined) [@novussubsole](/creator/undefined)

**Top assets mentioned**
[Alphabet Inc Class A (GOOGL)](/topic/$googl)
### Top Social Posts
Top posts by engagements in the last [--] hours

"China has a closed financial account. Its massive trade surplus would normally be expected to put upward pressure on its currency pulling in imports and making production outside of China cost competitive. 1/many Ill offer a very simple explanation for Chinas trade surplus one that few pundits in the West are willing to acknowledge: China makes a lot of stuff at prices the vast majority of the world is eager to pay. Ill offer a very simple explanation for Chinas trade surplus one that few pundits in the West are willing to acknowledge: China makes a lot of stuff at prices the vast majority of"  
[X Link](https://x.com/Brad_Setser/status/2000672303080685578)  2025-12-15T21:00Z 145.1K followers, 115.7K engagements


"Bottom line though is that you cannot understand the impact China is having on the global economy without understanding that China once again is resisting pressure on its currency to appreciate -- and that it uses exports to substitute for domestic stimulus. 7/7"  
[X Link](https://x.com/Brad_Setser/status/2000674689874641191)  2025-12-15T21:09Z 145.1K followers, 11.3K engagements


"Most of Argentina's debt is fx denominated or fx linked; and the rapid fall in the debt to GDP ratio is a function of the peso's appreciation more than Milei's tight fiscal policy -- 1/2 Public debt is now lower in Argentina than in Brazil Mileis fiscal shock cut the debt burden by 60% of GDP in just two years. With Argentina sticking to austerity while Brazilian fiscal accounts keep deteriorating local Argentine bonds look more attractive than Brazils. https://t.co/BwzAwsR8z2 Public debt is now lower in Argentina than in Brazil Mileis fiscal shock cut the debt burden by 60% of GDP in just"  
[X Link](https://x.com/Brad_Setser/status/2019887517323944296)  2026-02-06T21:34Z 145.1K followers, 66K engagements


"p.s. I would remind anyone thinking of selling the yen b/c of "fiscal" to buy the dollar that they selling the currency of a CA surplus country with a fiscal deficit in the 3% of GDP range (with Takaichi proposals maybe 3.5% of GDP I think) for a currency of a CA deficit country with a fiscal deficit of over 5% of GDP that is likely heading back up -- anyone worried about fiscal should sell yen for won or Swedish krona or Aussie dollars not for the US dollar. Thanks for your attention to this matter (p.s. selling yen b/c real rates are negative at the short-end is fine)"  
[X Link](https://x.com/Brad_Setser/status/2020534335292473704)  2026-02-08T16:24Z 145.1K followers, 18.6K engagements


"@VKMacro kind of crazy. why has this correlation developed and persisted"  
[X Link](https://x.com/Brad_Setser/status/2021567252236325289)  2026-02-11T12:49Z 145.1K followers, [----] engagements


"Crazy how much of the global (goods) trade surplus is in East Asia now. Even with the "fake" Irish pharma surplus the euro area is dwarfed 1/"  
[X Link](https://x.com/Brad_Setser/status/2021702712551678384)  2026-02-11T21:47Z 145.1K followers, 22.7K engagements


"But the bidding war for chips is driving up the surpluses of Taiwan and Korea . they are poised to reach all time highs in [----]. 3/"  
[X Link](https://x.com/Brad_Setser/status/2021703187250532426)  2026-02-11T21:49Z 145.1K followers, [----] engagements


"For a country that has added $7 trillion to the balance sheet of its central bank the big state commercial banks and the big policy banks over the last 25ys China actually does hold relatively few Treasuries 1/"  
[X Link](https://x.com/Brad_Setser/status/2021450671963374048)  2026-02-11T05:06Z 145.1K followers, 13.3K engagements


"Huge surplus in China alone of course -- over 1% of WGDP 2/"  
[X Link](https://x.com/Brad_Setser/status/2021702930080882754)  2026-02-11T21:48Z 145.1K followers, [----] engagements


"@LordPos3idon Taiwanese and Korean trade data for January don't show that the East Asian surplus has peaked. Chinese data isn't out. Don't see what you are seeing to be honest -- other than yes there will be a seasonal dip in the trailing 3m sum with the February data"  
[X Link](https://x.com/Brad_Setser/status/2021705898503090365)  2026-02-11T22:00Z 145.1K followers, [---] engagements


"But the wider band and explicit commitment to reserve accumulation is a modest step in the right direction and should facilitate the next IMF review (as Argentina clearly was going to miss its end December net reserves target) 7/ https://www.wsj.com/world/americas/milei-moves-to-ease-controls-on-argentine-peso-d327ab50st=URwn9V https://www.wsj.com/world/americas/milei-moves-to-ease-controls-on-argentine-peso-d327ab50st=URwn9V"  
[X Link](https://x.com/Brad_Setser/status/2001013135197790495)  2025-12-16T19:34Z 144.9K followers, [----] engagements


"@Gloeschi European banks have reduced their dollar funding need significantly v [--]. Japanese banks have increased there funding need. and China could if needed sell Treasuries/ Agencies to cover the funding need . and European banks could dump a lot of US credit. 1/2"  
[X Link](https://x.com/Brad_Setser/status/2010572018983596055)  2026-01-12T04:38Z 144.8K followers, [----] engagements


"The big Chinese banks are described by China itself as "State Commercial Banks" and owned by the state through Huijin. The policy banks are also state owned through a SAFE controlled vehicle after their [----] recapitalization. So @Brad_Setser and I have had this long argument where he argues that the Chinese banks (which he incorrectly calls state banks) are doing backdoor currency transactions for the Chinese govt and I argue that he is misinterpreting the data. One thing about these arguments So @Brad_Setser and I have had this long argument where he argues that the Chinese banks (which he"  
[X Link](https://x.com/Brad_Setser/status/2012665451021525063)  2026-01-17T23:16Z 144.9K followers, 46.2K engagements


"Gonna push back against my friends* at FT alphaville just a bit. The countries that have backed the Danes most strongly (and the Danes themselves) are the surplus countries of Europe & they have generally have a ton of public sector financial assets 1/ https://www.ft.com/content/beeaf869-ca12-4178-95a1-bfb69ee27ae4 https://www.ft.com/content/beeaf869-ca12-4178-95a1-bfb69ee27ae4"  
[X Link](https://x.com/Brad_Setser/status/2013410129127919936)  2026-01-20T00:35Z 144.9K followers, 59.4K engagements


"American financial exceptionalism is being tested by the foreign policy extremism of the American President. You what is worse than [--] Trn $ of supply of US Treasury holdings The fear of looming supply of [--] Trn $ of supply of US treasury holdings Ask EU long bond investors how the fear of looming Dutch pension funds selling has hammered the long end of EU bonds You what is worse than [--] Trn $ of supply of US Treasury holdings The fear of looming supply of [--] Trn $ of supply of US treasury holdings Ask EU long bond investors how the fear of looming Dutch pension funds selling has hammered the"  
[X Link](https://x.com/Brad_Setser/status/2013649611714445408)  2026-01-20T16:27Z 144.7K followers, 18.5K engagements


"Lots of rumors flying around about the Japanese yen -- given today's move. A few charts to highlight why yen weakness isn't totally justified by standard fundamentals will follow 1/"  
[X Link](https://x.com/Brad_Setser/status/2014825678818906211)  2026-01-23T22:20Z 144.8K followers, 22K engagements


""The PIFs portfolio of megaprojects is also being reviewed" The balance of payments break even is in the end undefeated . the Saudis need $90-100 oil to avoid persistent current account deficits and that is nowhere to be seen 1/2 Saudi Crown Prince Mohammed bin Salmans flagship project is set to be significantly downscaled and redesigned as a review of the massive development nears completion after years of delays and budget overruns. https://t.co/pBAoOSyssz https://t.co/XMlcRy2TgY Saudi Crown Prince Mohammed bin Salmans flagship project is set to be significantly downscaled and redesigned as"  
[X Link](https://x.com/Brad_Setser/status/2015498303362707766)  2026-01-25T18:53Z 144.7K followers, 490.1K engagements


"At the current combination of global oil prices and exchange rates (oil price is low key Asian currencies are weak) the entire global current account surplus is in East Asia -- & the Saudis don't have the funds to sustain all visions. 2/2"  
[X Link](https://x.com/Brad_Setser/status/2015499075538268373)  2026-01-25T18:56Z 144.7K followers, 24.6K engagements


"Japan's net holdings of bonds (net of foreign holdings of JGBs) is close to 50% of its GDP (a creditor position as big v GDP as the US net det position). That includes $1 trillion in bonds held in Japan's $1.175 trillion in reserves + over $2 trillion in other holdings 2/"  
[X Link](https://x.com/Brad_Setser/status/2015882430234705998)  2026-01-26T20:19Z 144.9K followers, 24.8K engagements


"That translates into big holdings of US debt -- the MoF's Treasuries all show up in the US TIC data but the corporate bonds held by the lifers postbank and the GPIF are only partially captured in the US data b/c of third party management/ the use of EU custodians 3/"  
[X Link](https://x.com/Brad_Setser/status/2015882972591788067)  2026-01-26T20:22Z 144.9K followers, 22.1K engagements


"The other key thing about Japan is that a large share of the country's foreign assets are held by the public sector: MoF has $1.175 trillion in reserves GPIF has over $900b in foreign assets including over $450b in bonds 7/ https://www.gpif.go.jp/en/ https://www.gpif.go.jp/en/"  
[X Link](https://x.com/Brad_Setser/status/2015884892819615859)  2026-01-26T20:29Z 144.7K followers, 14.8K engagements


"Post bank has another $600b in foreign bonds (mostly corporate bonds and mostly hedged) -- tho is it finally starting to raise its holdings of JGBS (its financial statement also shows how it became overweight in long-dated JGBs) 8/ https://www.jp-bank.japanpost.jp/en/ir/financial/pdf/en_pr251120.pdf https://www.jp-bank.japanpost.jp/en/ir/financial/pdf/en_pr251120.pdf"  
[X Link](https://x.com/Brad_Setser/status/2015885299696447533)  2026-01-26T20:31Z 144.7K followers, 13.1K engagements


"Can a country artificially weaken its currency by changing how it regulates its life insurance industry I think the answer is yes. A new blog one certain to increase my popularity with the Central Bank of China (Taipei) 1/ https://www.cfr.org/articles/taiwans-backdoor-currency-manipulation https://www.cfr.org/articles/taiwans-backdoor-currency-manipulation"  
[X Link](https://x.com/Brad_Setser/status/2015976731778191694)  2026-01-27T02:34Z 144.7K followers, 44.9K engagements


"These policy shifts -- plus the expectation that the CBC will stop any appreciation of the TWD at around [--] as it did last summer -- are a big reason why the TWD has weakened even as Taiwan's current account surplus has soared 5/"  
[X Link](https://x.com/Brad_Setser/status/2015979169646039382)  2026-01-27T02:44Z 144.8K followers, [----] engagements


"And Taiwan's surplus really is poised to soar. AI demand has pushed the q4 trade surplus up to insane levels -- the trade balance could jump by $100b this year pushing the CA surplus well above $200b 6/"  
[X Link](https://x.com/Brad_Setser/status/2015979551482859568)  2026-01-27T02:45Z 144.8K followers, 51.1K engagements


"There is a graph circulating showing a big fall in the dollar share of global reserves. That graph includes gold reserves and the value of the world's gold holdings have soared. Take out gold and there isn't much of a story . 1/2"  
[X Link](https://x.com/Brad_Setser/status/2016014033560727954)  2026-01-27T05:02Z 144.7K followers, 137.2K engagements


"100% Substantially stronger than its average across Trump's first term & still incredibly strong against the Asian surplus countries Worth emphasising in the midst of a lot of chat about the dollar that the USD is still strong indeed very strong in real terms relative to most of its modern history. (You could say that means it's got a long way to fall ofc) https://t.co/QPk4amJ4At Worth emphasising in the midst of a lot of chat about the dollar that the USD is still strong indeed very strong in real terms relative to most of its modern history. (You could say that means it's got a long way to"  
[X Link](https://x.com/Brad_Setser/status/2016347788800377166)  2026-01-28T03:09Z 144.7K followers, 42K engagements


"and as those who have seen me speak (or read my posts) know I do think these means that that there is a more scope for the dollar to fall than for the dollar to strengthen "  
[X Link](https://x.com/Brad_Setser/status/2016348150412275999)  2026-01-28T03:10Z 144.8K followers, [----] engagements


"The equilibrium condition for a big deficit country like the US isn't just that the RoW has to stay "long" US assets. It is that the rest of the world has to add that "long" -- and dollar/ USD longs are now a bit stale and at odds with Trump's stated desire for lower US rates"  
[X Link](https://x.com/Brad_Setser/status/2016348472274833542)  2026-01-28T03:11Z 144.8K followers, 12.5K engagements


"Great line "the mercantilism of a rising China interacted with the protectionism of a declining US" (from Martin Wolf)"  
[X Link](https://x.com/Brad_Setser/status/2016378660777755109)  2026-01-28T05:11Z 144.9K followers, 10.9K engagements


"@MonaAli_NY_US the dollar depreciated by [--] pp in h1 after rising [--] pp in q4 of [----] and there is no reason in any model that this little roundtrip would be expected to have any impact on the trade balance (plus the lags are 2-3ys)"  
[X Link](https://x.com/Brad_Setser/status/2016535346469638293)  2026-01-28T15:34Z 144.8K followers, [---] engagements


"Wonder if this qualifies as an intellectual scoop . 2/2 https://www.cfr.org/articles/dollars-global-role-and-financing-us-external-deficit https://www.cfr.org/articles/dollars-global-role-and-financing-us-external-deficit"  
[X Link](https://x.com/Brad_Setser/status/2016660524079943885)  2026-01-28T23:51Z 144.8K followers, 10.3K engagements


"Detailed and well reported story on the weakness in China's domestic economy 1/ https://www.wsj.com/world/china/deflation-doom-loop-china-economy-25b0938amod=hp_listb_pos1 https://www.wsj.com/world/china/deflation-doom-loop-china-economy-25b0938amod=hp_listb_pos1"  
[X Link](https://x.com/Brad_Setser/status/2016736742213104074)  2026-01-29T04:54Z 144.9K followers, 18K engagements


"The basic narrative is well known now but the variety of numbers that show a nominal slowdown in China over the second half of last year still packs a punch 2/"  
[X Link](https://x.com/Brad_Setser/status/2016737109051101552)  2026-01-29T04:56Z 144.9K followers, [----] engagements


"The new Treasury policy allows interention to smooth volatility (fair enough) but the Treasury wants countries to have a symmetrical intervention pattern (good change tho before Taiwan is already gaming it) 5/"  
[X Link](https://x.com/Brad_Setser/status/2017088103937200596)  2026-01-30T04:10Z 144.9K followers, [----] engagements


"The Treasury also will look at macroprudential policies that have an exchange rate impact -- a needed change though I worry that the Treasury's approach here is too focused on capital controls and misses obvious things like insurance regs 6/"  
[X Link](https://x.com/Brad_Setser/status/2017088499380347325)  2026-01-30T04:12Z 144.8K followers, [----] engagements


"I particularly enjoyed those parts of the report that discuss times when key Asian countries have pulled the wool over the eyes of those writing past Treasury fx reports (presented as examples of what might trigger a designation) 9/"  
[X Link](https://x.com/Brad_Setser/status/2017089895634764031)  2026-01-30T04:18Z 144.7K followers, [----] engagements


"Those include: China's undisclosed transfers of fx to the policy banks (including the conversion of entrusted loans into equity) Taiwan's undisclosed (before 2020) swaps book (disguising obvious intervention) and the well timed [----] GPIF diversification 10/"  
[X Link](https://x.com/Brad_Setser/status/2017090563393093935)  2026-01-30T04:20Z 144.7K followers, [----] engagements


"@gabewildau Still seems to be close to zero after a clear slowdown from late last year. don't think the longer series changes the core story in any way. deceleration to zero is the headline either way"  
[X Link](https://x.com/Brad_Setser/status/2017128821695160609)  2026-01-30T06:52Z 144.8K followers, [----] engagements


"One big caveat though -- relying on foreign investors (Korea Japan the Emirates perhaps the Saudis) to fund new industrial investment (outsourcing industrial policy so speak) works against selling cars (and selling bonds) 1/2 Trump's dollar policy could be summed up as: "Sell cars not bonds." A trade deficit is financed by selling IOUs such as bonds. Past presidents prioritized confidence in bonds and the U.S. financial system and therefore a strong dollar. Trump prioritizes reducing the trade Trump's dollar policy could be summed up as: "Sell cars not bonds." A trade deficit is financed by"  
[X Link](https://x.com/Brad_Setser/status/2017266059674350076)  2026-01-30T15:58Z 144.8K followers, 10.2K engagements


"The investment deals imply in a sense selling off current or more likely future factories to foreign investors often state backed investors. I find that a bit awkward to be honest . if the resulting sovereign outflows keep say the KRW weak for example it doesn't help sell cars 2/2 https://twitter.com/i/web/status/2017266448553410635 https://twitter.com/i/web/status/2017266448553410635"  
[X Link](https://x.com/Brad_Setser/status/2017266448553410635)  2026-01-30T15:59Z 144.8K followers, [----] engagements


"In the last 6ms of data (h2 2025) China (PBOC plus state banks) bought close to $300b in foreign exchange (per the settlement data) -- more than enough for the Treasury to ding China if it wants to in the next fx report 1/2"  
[X Link](https://x.com/Brad_Setser/status/2017280512046334033)  2026-01-30T16:55Z 144.9K followers, [----] engagements


"Looks like China is going to post a strong ($200b) current account surplus in q4. The balance of payments goods number is out and in December it topped customs -- reversing the broad pattern of recent years 1/"  
[X Link](https://x.com/Brad_Setser/status/2017319173500641699)  2026-01-30T19:29Z 144.7K followers, 11.6K engagements


"It would help if my critics accurately represented my thinking -- What I actually believe is that the pace of China's export volume growth is influenced by the level of the RMB . 1/3 Brad Setser really thinks everyone outside of China is going to suddenly stop buying these things just because the Chinese yuan becomes a little more expensive. I mean - come on off it man. Brad Setser really thinks everyone outside of China is going to suddenly stop buying these things just because the Chinese yuan becomes a little more expensive. I mean - come on off it man"  
[X Link](https://x.com/Brad_Setser/status/2017338942018711635)  2026-01-30T20:47Z 144.8K followers, 15.7K engagements


"Easy enough for China to have a strong currency -- just continue with current crawling appreciation against the dollar . 1/ 🛑 CHINA IS ON A STRONG CURRENCY MISSION TO MAKE THE YUAN A GLOBAL RESERVE: XI 🛑 CHINA IS ON A STRONG CURRENCY MISSION TO MAKE THE YUAN A GLOBAL RESERVE: XI"  
[X Link](https://x.com/Brad_Setser/status/2018072836569497721)  2026-02-01T21:23Z 144.7K followers, 24.7K engagements


"The massive trade surplus clearly would support a stronger currency -- and the slow crawl encourages exporters to convert USD to CNY (and bring legacy USD held offshore home) so the flows support it. $100b plus in Decmeber settlement is a case in point 2/"  
[X Link](https://x.com/Brad_Setser/status/2018073271296508133)  2026-02-01T21:25Z 144.7K followers, 18.7K engagements


"Don't think either the EU or the US would object to a stronger yuan -- so the ball really in in China's hands. Fix the yuan stronger and it will be stronger "  
[X Link](https://x.com/Brad_Setser/status/2018073540495380674)  2026-02-01T21:26Z 144.7K followers, [----] engagements


"Even with a faster pace of appreciation against the dollar in the last two months the CNY is close to back its low v the Euro. Highlights one of many dilemmas Europe now faces: a stronger EUR against the dollar is also a stronger EUR against China . The massive trade surplus clearly would support a stronger currency -- and the slow crawl encourages exporters to convert USD to CNY (and bring legacy USD held offshore home) so the flows support it. $100b plus in Decmeber settlement is a case in point 2/ https://t.co/nMLZfsPDmA The massive trade surplus clearly would support a stronger currency"  
[X Link](https://x.com/Brad_Setser/status/2018109200702779812)  2026-02-01T23:48Z 144.7K followers, 11.6K engagements


"Europe's imports from China have levelled off in recent months in euro terms (the "advantage" of a strong euro) but the absolute trade gap is still huge and in volume terms the deficit is obviously still rising"  
[X Link](https://x.com/Brad_Setser/status/2018109916016164892)  2026-02-01T23:51Z 144.7K followers, [----] engagements


"I was worried that my criticism of Taiwan's foreign exchange policy would not get a response -- I need not have worried 1/"  
[X Link](https://x.com/Brad_Setser/status/2018181527872413873)  2026-02-02T04:35Z 144.9K followers, 18.3K engagements


"The last time the CBC criticized my analysis they called me a blogger; I have now at least been upgraded to a scholar at a think tank (google translate says they are responding to scholars but I think I am alone here) 2/ https://www.cbc.gov.tw/tw/cp-302-189768-90fef-1.html https://www.cbc.gov.tw/tw/cp-302-189768-90fef-1.html"  
[X Link](https://x.com/Brad_Setser/status/2018182355718914241)  2026-02-02T04:39Z 144.7K followers, [----] engagements


"With respect to the substance of the CBC's argument the most amusing bit is the claim that neither purchasing power parity nor the size of the current account surplus is relevant for assessing a currency's fair value . 3/"  
[X Link](https://x.com/Brad_Setser/status/2018183170252825046)  2026-02-02T04:42Z 144.9K followers, [----] engagements


"That isn't the hill I would have chosen to die on . what pray tell does determine a currency's fair value Then again the CBC doesn't have much of a case to argue . the current account surplus is set to surge 4/"  
[X Link](https://x.com/Brad_Setser/status/2018183702342144376)  2026-02-02T04:44Z 144.9K followers, [----] engagements


"The CBC wants to get credit for the TWD's nominal appreciation (v a basket) since [----] never mind the real depreciation over the same period . 5/"  
[X Link](https://x.com/Brad_Setser/status/2018184303667036458)  2026-02-02T04:46Z 145K followers, [----] engagements


"Trust me when inflation differentials go the other way and higher domestic inflation leads to a real appreciation no central bank that I know of has been able to avoid a devaluation on the grounds that the nominal exchange rate has been stable 6/"  
[X Link](https://x.com/Brad_Setser/status/2018184619397361697)  2026-02-02T04:48Z 145K followers, [----] engagements


"The CBC argues that they aren't responsible for the decision of the Financial Supervisory Commission to allow the lifers in effect not to hedge (b/c the lifers now don't need to mark fx bonds to the fx market) 7/"  
[X Link](https://x.com/Brad_Setser/status/2018185373390696552)  2026-02-02T04:51Z 144.7K followers, [----] engagements


"Fair enough not all currency manipulation is done by central banks -- the CBC didn't challenge that the reduction in the hedge ratio will have the effect of weakening the TWD now that the lifers have run down their position in the NDF market. 8/ https://www.cfr.org/articles/taiwans-backdoor-currency-manipulation https://www.cfr.org/articles/taiwans-backdoor-currency-manipulation"  
[X Link](https://x.com/Brad_Setser/status/2018185766392754381)  2026-02-02T04:52Z 145K followers, [----] engagements


"The CBC also argues that it doesn't target an exchange rate level and its intervention at [--] (in [--] and again in the middle of last year) and at [--] (in 20/21) was just to limit volatility and prevent a one sided market 9/"  
[X Link](https://x.com/Brad_Setser/status/2018186384339591406)  2026-02-02T04:55Z 145K followers, [---] engagements


"Most of the underlying data for China's [----] current account surplus has been released and it looks like the IMF's initial forecast will be off by over $300b ($370b v an estimated surplus of over $700b) 1/"  
[X Link](https://x.com/Brad_Setser/status/2018197233741521205)  2026-02-02T05:38Z 144.7K followers, [----] engagements


"The IMF is starting to take the issue of China's surplus more seriously (see Georgevia's comments at the end of the mission) but the IMF has a ways to go before it catches up to the intellectual frontier in BoP analysis (especially re: China) 2/"  
[X Link](https://x.com/Brad_Setser/status/2018197772768338092)  2026-02-02T05:40Z 145K followers, [----] engagements


"The big forecast miss (I am using the forecast that went into the ESR even if the ESR technically looked back at 2024) was a function of ignoring the lagged impact of the real exchange rate move/ RER levels . and overestimating the [--] fiscal stimulus 3/"  
[X Link](https://x.com/Brad_Setser/status/2018198554192339164)  2026-02-02T05:43Z 145K followers, [----] engagements


"That at least is my conclusion after following the data closely . BoP goods is much higher relative to customs tan it generally was in [--] and the first part of [--] 5/"  
[X Link](https://x.com/Brad_Setser/status/2018201168170643816)  2026-02-02T05:53Z 144.7K followers, [----] engagements


"And the even broader point is that there is no need to wade into the details of how China now constructs its balance of payments to see that China's surplus is big enough to be a source of global concern (in reality it is well over the soon to be reported $700b) 6/"  
[X Link](https://x.com/Brad_Setser/status/2018201730110877728)  2026-02-02T05:56Z 144.7K followers, [----] engagements


"Have to net out pharma and gold to get a true measure and even then there was a bit of q1 front running in the data -- deficit is down in autos/ household non-durables but it is up in electronics (and pharma which is VERY volatile m/m) Yes US trade deficit jumped 95% MoM in November (from $29.2B to $56.8B). But it's significantly reduced compared to Nov [----] (down 29% YoY). Trump took office at [----] https://t.co/CPSUCteDmD Yes US trade deficit jumped 95% MoM in November (from $29.2B to $56.8B). But it's significantly reduced compared to Nov [----] (down 29% YoY). Trump took office at -120"  
[X Link](https://x.com/Brad_Setser/status/2018492148958531593)  2026-02-03T01:10Z 144.7K followers, [----] engagements


"A new blog on China's hidden fx intervention which reached staggering scale in December [----] 1/ https://www.cfr.org/articles/the-pboc-the-state-banks-and-backdoor-intervention https://www.cfr.org/articles/the-pboc-the-state-banks-and-backdoor-intervention"  
[X Link](https://x.com/Brad_Setser/status/2018493868170268789)  2026-02-03T01:16Z 144.8K followers, 15K engagements


"The blog is detailed and technical -- and thus probably best read by those with a real interest in central bank balance sheets the balance of payments and how to assess backdoor foreign currency intervention 2/"  
[X Link](https://x.com/Brad_Setser/status/2018494555415331128)  2026-02-03T01:19Z 144.7K followers, [----] engagements


"Drawing on historical data I propose that the gap between fx settlement and the foreign assets on the PBOC's balance sheet (fx reserves + other f. assets) is a good indicator of hidden intervention -- 3/"  
[X Link](https://x.com/Brad_Setser/status/2018494899591455145)  2026-02-03T01:21Z 144.7K followers, [----] engagements


"The settlement gap (huge in December . ) is a more reliable measure than the sum of the PBOC balance sheet and the state banks net foreign assets -- which conceptually includes items other than intervention 4/"  
[X Link](https://x.com/Brad_Setser/status/2018495841258893345)  2026-02-03T01:24Z 144.7K followers, [----] engagements


"I also spend a fair amount of time detailing SAFE's remaining balance sheet mysteries -- starting with the gap between the PBOC balance sheet measure and BoP reserves (which is possibly linked to the absence of interest income on the PBOC's balance sheet) 5/"  
[X Link](https://x.com/Brad_Setser/status/2018496203214700907)  2026-02-03T01:26Z 144.9K followers, [----] engagements


"The second is how SAFE accounts for the fx that it has invested domestically and that don't appear in its formal fx reserves -- entrusted loans at the policy banks the recap vehicle for the policy banks the Silk Road fund . 6/ https://www.cfr.org/articles/how-hide-your-foreign-exchange-reserves-users-guide https://www.cfr.org/articles/how-hide-your-foreign-exchange-reserves-users-guide"  
[X Link](https://x.com/Brad_Setser/status/2018496743944429593)  2026-02-03T01:28Z 144.9K followers, [----] engagements


"My latest blog looks both at how fx settlement (a measure that includes the state banks) has displaced the PBOC's own reported reserves as the best metric for Chinese intervention & lat some of SAFE's balance sheet mysteries 3/ https://www.cfr.org/articles/the-pboc-the-state-banks-and-backdoor-intervention https://www.cfr.org/articles/the-pboc-the-state-banks-and-backdoor-intervention"  
[X Link](https://x.com/Brad_Setser/status/2018713085666558179)  2026-02-03T15:48Z 144.7K followers, [----] engagements


"Would love to see the IMF and others look seriously as a few questions about the PBOC -- a) where is the interest income from the formal reserves ware-housed as it clearly doesn't register in "fx reserves" on the PBOC's balance sheet; and 4/"  
[X Link](https://x.com/Brad_Setser/status/2018713455599976590)  2026-02-03T15:49Z 144.7K followers, [----] engagements


"how does the PBOC account for fx handed over to domestic financial institutions (who then invest abroad). The PBOC has provided large entrusted loans to fund the policy banks for example & converted $100b of that into equity. 5/"  
[X Link](https://x.com/Brad_Setser/status/2018713867845554603)  2026-02-03T15:51Z 144.7K followers, [----] engagements


"That is legacy intervention that seemingly disappeared from the balance sheet -- but it is potentially significant in size. SAFE has claims on many banks via entrusted fx loans it owns $100b in entrusted loans that were converted into equity (now in "Buttonwood holdings" and also provided fx to China's smaller SWFs like the Silk Road Fund . 5/ https://twitter.com/i/web/status/2018714332465360951 https://twitter.com/i/web/status/2018714332465360951"  
[X Link](https://x.com/Brad_Setser/status/2018714332465360951)  2026-02-03T15:52Z 144.7K followers, [----] engagements


"If nothing else the sheer size of the state banks activities -- over $100b in purchases in December alone -- will make their role in sustaining the RMB's current undervaluation too big to ignore 9/"  
[X Link](https://x.com/Brad_Setser/status/2018715603150708954)  2026-02-03T15:58Z 144.9K followers, [----] engagements


"And do read this blog -- it provides a blueprint for what the Treasury should do in its next (and perhaps consequential) foreign exchange report among other things . 10/10 https://www.cfr.org/articles/the-pboc-the-state-banks-and-backdoor-intervention https://www.cfr.org/articles/the-pboc-the-state-banks-and-backdoor-intervention"  
[X Link](https://x.com/Brad_Setser/status/2018715906277363948)  2026-02-03T15:59Z 144.9K followers, [----] engagements


"@songpinganq the bilateral balance is the wrong measure. but 100% agree that Taiwan's currency practices are a problem and the US should be pushing the CBC and the regulators hard to allow more TWD appreciation you are barking up the wrong tree here https://www.cfr.org/articles/taiwans-backdoor-currency-manipulation https://www.cfr.org/articles/taiwans-backdoor-currency-manipulation"  
[X Link](https://x.com/Brad_Setser/status/2018716362995122556)  2026-02-03T16:01Z 144.7K followers, [---] engagements


"@PPGMacro Don't have full visibility. Logan Wright of Rhodian thinks they are also supplying dollars to the swaps market -- but the visible balance sheet shows increased holdings of foreign securities + increased repo + increased funding of non banks financial institutions"  
[X Link](https://x.com/Brad_Setser/status/2018737044479254747)  2026-02-03T17:23Z 144.7K followers, [---] engagements


"I covered this in the blog. a) FX deposits don't actually respond to market conditions (that's the puzzle; see the wrong way correlation with the rate differential) and b) FX deposits lagged settlement in h2 [----] . And the problem with all of this is that if you look at the balance sheets of the banks it becomes pretty obvious that most of the foreign exchange is held by depositors and what you are seeing are Chinese depositors reacting to market conditions. And the problem with all of this is that if you look at the balance sheets of the banks it becomes pretty obvious that most of the"  
[X Link](https://x.com/Brad_Setser/status/2018737825709989981)  2026-02-03T17:26Z 144.8K followers, 12.1K engagements


"This could be promising -- Have been thinking of a special safeguard that could be applied automatically if a country with a large surplus is growing through net exports . but perhaps there are other/ better ideas 1/2"  
[X Link](https://x.com/Brad_Setser/status/2018787337514479668)  2026-02-03T20:43Z 144.8K followers, [----] engagements


"The challenge is identifying realistic thresholds that would give counterparts the right to respond . and that are hard for a surplus country to game. And of course China retaliates even against "legitimate" trade defenses . 2/2 https://www.bloomberg.com/news/articles/2026-02-03/france-eyes-shared-tools-at-g-7-to-address-economic-imbalances https://www.bloomberg.com/news/articles/2026-02-03/france-eyes-shared-tools-at-g-7-to-address-economic-imbalances"  
[X Link](https://x.com/Brad_Setser/status/2018787723319153001)  2026-02-03T20:44Z 144.8K followers, [----] engagements


"p.s. a common sectoral safeguard (most likely a tariff) across the G-7 would potentially be powerful. but all ears for better ideas"  
[X Link](https://x.com/Brad_Setser/status/2018787894220275861)  2026-02-03T20:45Z 144.8K followers, [----] engagements


"Watch Korea; they are trying to figure how to hit their $20b commitment. some could be financed in the US (for US investment) by one of the Korean state development banks. Taiwan's current account surplus is heading to $200b on TSMC and AI chip demand; think TSMC can cover most of the flow. https://twitter.com/i/web/status/2019435615071121706 https://twitter.com/i/web/status/2019435615071121706"  
[X Link](https://x.com/Brad_Setser/status/2019435615071121706)  2026-02-05T15:39Z 144.8K followers, [---] engagements


"@goodtaxtakes @mercatus Seems off for big tech and big pharma -- they don't move to Ireland to lower the tax incidence on their workers. Guess I need to look at the underlying studies but how does this describe Apple or Pfizer in a useful way"  
[X Link](https://x.com/Brad_Setser/status/2019440670155346106)  2026-02-05T15:59Z 144.8K followers, [---] engagements


"Chinese firms had a clear playbook from the section [---] tariffs in Trump's first term for tariff avoidance (move final assembly to SE Asia using a lot Chinese parts) . that helped them get around the period of prohibitive bilateral tariffs "  
[X Link](https://x.com/Brad_Setser/status/2019866884511088951)  2026-02-06T20:12Z 145.1K followers, [----] engagements


"The irony is that by the end of [----] the term [--] tariff on China was 20% about the same as the term [--] tariff on SE Asia. But decisions about [----] were likely based on expectations set by the campaign proposal (a higher tariff on China)"  
[X Link](https://x.com/Brad_Setser/status/2019867215516852341)  2026-02-06T20:14Z 144.9K followers, [----] engagements


"p.s. the 25% tariff on half of [----] trade is still in place but that high tariff only impacts about a third of [----] trade . 2/3rds faces a tariff that by the end of the year was close to most other tariffs on Asia"  
[X Link](https://x.com/Brad_Setser/status/2019867552437178633)  2026-02-06T20:15Z 144.9K followers, [----] engagements


"(and obviously the main risk for foreign investors in Argentina bonds is the risk that peso has to depreciate for Argentina to restock its reserves so external risks are relevant to any investment decision)"  
[X Link](https://x.com/Brad_Setser/status/2019888549928083537)  2026-02-06T21:38Z 145.1K followers, [----] engagements


"An incredibly weak currency can always get weaker -- but the yen is already weaker than would be suggested by the nominal interest rate differential and the odds are that the BoJ raises rates this year and the Fed cuts "  
[X Link](https://x.com/Brad_Setser/status/2020196255113367941)  2026-02-07T18:01Z 144.9K followers, [----] engagements


"The the BoJ is both raising the policy rate (admittedly too slowly) and that its balance sheet is shrinking -- Would argue that the weak yen is a big part of the reason why 10+ y JGBs aren't more attractive with the current very steep yield curve. Don't think the policy rate 10ys out will average [--] . rate differentials clearly have narrowed substantially v treasuries over the last year https://twitter.com/i/web/status/2020201189191700987 https://twitter.com/i/web/status/2020201189191700987"  
[X Link](https://x.com/Brad_Setser/status/2020201189191700987)  2026-02-07T18:21Z 144.9K followers, [----] engagements


"Actually I am just presenting the debt math. Sorry if you think that is non sense. FX debt is very sensitive to the exchange rate and that moved a lot. Bringing the headline fiscal deficit down was a real achievement (there is still an off budget deficit at the BCRA) but it doesn't explain the rapid fall in the stock. And do need to look at external variables as well. Pretty sure the next IMF review will make points similar to ones I am making in the technical appendix https://twitter.com/i/web/status/2020212604635840893 https://twitter.com/i/web/status/2020212604635840893"  
[X Link](https://x.com/Brad_Setser/status/2020212604635840893)  2026-02-07T19:06Z 145K followers, [----] engagements


"@exurbandmv @robin_j_brooks BoJ is clearly shrinking its balance sheet (which is big no doubt so purchases are less that maturing bonds . ) https://fred.stlouisfed.org/graph/g=ok2Z https://fred.stlouisfed.org/graph/g=ok2Z"  
[X Link](https://x.com/Brad_Setser/status/2020213603874349146)  2026-02-07T19:10Z 144.9K followers, [---] engagements


"@maxpoweeeeer @superavitfiscal there were some important changes to the debt held at the BCRA if memory serves and some net repayment of bonds (USD) at the expense of reserves/ net reserves. increase USD debt issued by the BCRA tho"  
[X Link](https://x.com/Brad_Setser/status/2020248412294447136)  2026-02-07T21:28Z 144.9K followers, [--] engagements


"real interest rates on domestic debt were also quite negative in [----] (see the IMF) and that helped. fiscal has been tight as well. think your chart actually makes my point - namely that the majority of fall from peak debt levels (which were a function of the depreciation) came through real appreciation"  
[X Link](https://x.com/Brad_Setser/status/2020264374519144480)  2026-02-07T22:32Z 144.9K followers, [---] engagements


"a) tell me more about the fiscal transfer of income as it doesn't appear in the BoP (but there are lots of ways of doing the accounting) b) I am proposing selling the fx for yen so reserve growth would be zero w/o intervention (it was $35b in the last 4qs of BoP data) c) I would buy back the ultralongs (low coupon) that trade at a deep discount and thus reduce the amount of debt that has be refinanced over time. but it is more a stock transaction than a flow transaction https://twitter.com/i/web/status/2020539707826864562 https://twitter.com/i/web/status/2020539707826864562"  
[X Link](https://x.com/Brad_Setser/status/2020539707826864562)  2026-02-08T16:46Z 144.9K followers, [---] engagements


"@halobrief 3% is the return on the assets currently give or take (a little higher now). So sustainable indefinitely (doesn't use the principal by design). and yes it functionally acts like intervention (tho accumulation by retaining the fx from interest isn't treated as intervention)"  
[X Link](https://x.com/Brad_Setser/status/2020545093825089739)  2026-02-08T17:07Z 144.9K followers, [---] engagements


"@halobrief and thanks for the detail on the fiscal accounting -- which certainly differs from the BoP accounting. v helpful"  
[X Link](https://x.com/Brad_Setser/status/2020545314877280296)  2026-02-08T17:08Z 144.9K followers, [---] engagements


"@globalcitizen_K well the lifers aren't buying right now so the market for ultralongs and 20s is thin. but think the main problem is the legacy low coupon ultra longs which are both undeterwater and very volatile b/c the lack of coupon adds to their duration"  
[X Link](https://x.com/Brad_Setser/status/2020554258131689588)  2026-02-08T17:44Z 144.9K followers, [---] engagements


"External debt to GDP of course is a function of "GDP" in dollars as well -- and that has generated large moves in the external debt to GDP ratio (most external debt is fx denominated) 5)"  
[X Link](https://x.com/Brad_Setser/status/2020577142510432530)  2026-02-08T19:15Z 145K followers, [----] engagements


"The real exchange rate did depreciate in q2 and q3 [----] -- thankfully as it was insanely overvalued in late 24/ early [--] (I think a bit more real depreciation would be healthy as Argentina needs sustained surpluses to rebuild reserves organically) 6)"  
[X Link](https://x.com/Brad_Setser/status/2020577759148552206)  2026-02-08T19:17Z 145K followers, [----] engagements


"The combination of increased dollar borrowing and a somewhat weaker real exchange rate (i.e. a bit lower dollar GDP in 2025) pushed external debt to GDP up 7)"  
[X Link](https://x.com/Brad_Setser/status/2020578093765972169)  2026-02-08T19:18Z 145.1K followers, [----] engagements


"Current account deficit would absolutely explode and stronger RER + more external debt is inconsistent with Argentina's limited export base. And not sure debt dynamics are robust to high real domestic interest rates. low fiscal deficit is largely a function of low interest bill v size of the debt"  
[X Link](https://x.com/Brad_Setser/status/2020583433487908969)  2026-02-08T19:40Z 144.9K followers, [---] engagements


"@Augustus_kaizer that one is a bit harder. stock matters. technicals matter. I actually like long end JGBs (great yield hedged back to USD and can take off the hedge tactically) but the underlying is very volatile and domestic institutions haven't moved back in "  
[X Link](https://x.com/Brad_Setser/status/2020585950288756862)  2026-02-08T19:50Z 144.9K followers, [---] engagements


"@Augustus_kaizer So runs the risk of being the new widow maker as underlying legacy bonds have low coupons and price moves a lot. but curve seems too steep to me beyond the 10y point and as legacy foreign bonds mature I think the lifers/ others become buyers (but that's slow)"  
[X Link](https://x.com/Brad_Setser/status/2020586317860745409)  2026-02-08T19:51Z 144.9K followers, [---] engagements


"@globalcitizen_K I trust my BoP analysis more than consensus. [----] exports juiced by China's non purchase of US soybeans; above what would be expected on global prices - and think Caputo juiced [----] exports with a couple of financial tricks that cannot be replicated"  
[X Link](https://x.com/Brad_Setser/status/2020588286172135566)  2026-02-08T19:59Z 144.9K followers, [---] engagements


"@dampedspring @agurevich23 I also share it . doesn't make sense for Japanese institutions to buy foreign bonds unhedged at this combination of the yen and JP rates. BoJ likely to hike this year Fed likely to cut . fundamentals no longer support extreme yen weakness"  
[X Link](https://x.com/Brad_Setser/status/2020733236763070736)  2026-02-09T05:35Z 145K followers, [----] engagements


"MoF realizes a tiny fraction of the massive gain on its reserve portfolio (ought at 80-100 JPY to the USD) -- win for JP's taxpayer and MoF buybacks a portion of its nominal debt stock at a massive discount (another win for JP's taxpayer) 2/"  
[X Link](https://x.com/Brad_Setser/status/2013804635920769394)  2026-01-21T02:43Z 145.1K followers, [----] engagements


"Huge fan of Mr. Arnold's twitter feed by the way -- But no country with $2 trillion (MOF + GPIF) in sovereign foreign assets and a postal savings bank that holds more foreign than domestic assets is going bust . 3/"  
[X Link](https://x.com/Brad_Setser/status/2013804970425098715)  2026-01-21T02:44Z 145.1K followers, [----] engagements


"The Treasury has indicated that it will look at the activities of China's state banks in its next assessment of China's currency policies-- It is hard to see how this doesn't become a bit of an issue . unless of course summitry gets in the way of analysis 1/"  
[X Link](https://x.com/Brad_Setser/status/2018712010490257865)  2026-02-03T15:43Z 145.1K followers, 13.5K engagements


"It is quite clear that state bank purchases (and in 23/ early [--] sales) of fx have replaced PBOC purchases and sales and the core technique China uses to manage the band around the daily fx -- i.e. settlement looks like an intervention variable 2/"  
[X Link](https://x.com/Brad_Setser/status/2018712461524771253)  2026-02-03T15:45Z 145.1K followers, [----] engagements


"Taiwan's massive exports to the US are actually a sign that the AI boom/ bubble is making Taiwan's already unbalanced economy even more unbalanced . America is a Pacific Rim Nation and we will prosper more and more as we turn our gaze away from Europe. America is a Pacific Rim Nation and we will prosper more and more as we turn our gaze away from Europe"  
[X Link](https://x.com/Brad_Setser/status/2019446211820855519)  2026-02-05T16:21Z 145.1K followers, 11.2K engagements


"Don't think this analogy works at all -- Japan's yen isn't strong; it is incredibly weak v the dollar and in real effective terms (at its early 70s level) Japan runs a current account surplus and its government has massive external assets In [----] Erdogan kept Turkish Lira artificially strong until the May election. The day after he won Turkish Lira collapsed. It's depressing to see Japan to fall into this kind of thing. All the recent intervention talk has been cynical electioneering. https://t.co/9tlhES3KS0 https://t.co/k89v1uAGzr In [----] Erdogan kept Turkish Lira artificially strong until"  
[X Link](https://x.com/Brad_Setser/status/2020195764429824307)  2026-02-07T17:59Z 145.1K followers, 25.9K engagements


"May just be semantics but the semantics are important -- Reduces the impact of a bigger fiscal deficit on the debt stock but doesn't technically fund it . 2/2"  
[X Link](https://x.com/Brad_Setser/status/2020533499980107973)  2026-02-08T16:21Z 145.1K followers, [----] engagements


"Leading indicators (Asian export data + customs and border patrol data) suggest a surge in the US December trade deficit -- almost certainly driven by imports of chips. No way Taiwan's surplus surges by over $100b (a year) w/o some reflection on the US side . 2/"  
[X Link](https://x.com/Brad_Setser/status/2020954121331720438)  2026-02-09T20:13Z 145.1K followers, [----] engagements


"@vshih2 would be deeply ironic if the folks at Zhongnanhai needed me to interpret the PBOC's data"  
[X Link](https://x.com/Brad_Setser/status/2020959388513534036)  2026-02-09T20:34Z 145.1K followers, [----] engagements


"@Gloeschi don't think you need to worry too much about the strong side of the stated band "  
[X Link](https://x.com/Brad_Setser/status/2020981568781820224)  2026-02-09T22:02Z 145.1K followers, [----] engagements


"@novussubsole simple answer is the trade / current account surplus. exporters have the right to repatriate"  
[X Link](https://x.com/Brad_Setser/status/2021066787287335018)  2026-02-10T03:40Z 145.1K followers, [---] engagements


"@kellyenz more by the surge in demand tho the TWD is also clearly exceptionally undervalued"  
[X Link](https://x.com/Brad_Setser/status/2021316751678402986)  2026-02-10T20:14Z 145.1K followers, [---] engagements


"China's global trade surplus is at record levels after two years of getting [---] pp of growth from net exports. Import volume growth has been more or less zero over this period of time. And Chinese state banks bought $100b in a month to resist currency appreciation . 1/2 This morning in Davos @SecScottBessent told @DashaBurns that the U.S. relationship with China has reached a very good equilibrium where disagreements are less likely to turn into full-scale economic conflict as they did last year. My writeup: https://t.co/ljVRGlsML7 This morning in Davos @SecScottBessent told @DashaBurns that"  
[X Link](https://x.com/Brad_Setser/status/2014414959761830364)  2026-01-22T19:08Z 145.1K followers, 13.6K engagements


"Japan is an interesting case in a lot of ways. It has a ton of domestic debt (and significant domestic financial assets) which generates heated concerns about its solvency/ ability to manage higher rates. But it is also a massive global creditor -- 1/"  
[X Link](https://x.com/Brad_Setser/status/2015881473060991405)  2026-01-26T20:16Z 145.1K followers, 148K engagements


"Think I may have front run PIMCO on this at least intellectually -- Have been arguing for a while that equity investors shouldn't assume that the dollar will rally into an equity sell-off . 1/2 For decades foreign investors enjoyed a free lunch: U.S. Treasuries offered attractive yields while the U.S. dollar provided natural equity hedging. That era is over. Amid ongoing dollar depreciation hedging U.S. fixed income often locks in negative yields for investors abroad https://t.co/r2JqTEfeJG For decades foreign investors enjoyed a free lunch: U.S. Treasuries offered attractive yields while the"  
[X Link](https://x.com/Brad_Setser/status/2016660001171865983)  2026-01-28T23:49Z 145.1K followers, 132.2K engagements


"A chart showing the large fall in Argentina's public debt to GDP has been circulating -- That number is heavily influenced by Argentina's real exchange rate and by BCRA/ MoF accounting issues. Worth also looking at a chart of Argentina's external debt 1)"  
[X Link](https://x.com/Brad_Setser/status/2020575468672753863)  2026-02-08T19:08Z 145.1K followers, 18.2K engagements


"Bloomberg reports that China's regulators have warned China's state banks about the risk of holding too many Treasuries -- The Chinese regulators must know something that the Treasury doesn't as the Treasury data doesn't suggest that China has been buying any Treasuries 1/"  
[X Link](https://x.com/Brad_Setser/status/2020891233682358445)  2026-02-09T16:03Z 145.1K followers, 119.7K engagements


"The official US data on foreign holdings doesn't show any basis for Chinese concern -- China's Treasuries in US custodianship (in theory state accounts as well as state bank accounts) are heading down not up 2/"  
[X Link](https://x.com/Brad_Setser/status/2020891607914992075)  2026-02-09T16:04Z 145.1K followers, [----] engagements


"So I take the regulatory warning as an indicator that the US data is incomplete and it isn't capturing the US bonds held by the state commercial banks (and probably not all the bonds held by SAFE either). 4/"  
[X Link](https://x.com/Brad_Setser/status/2020892087395242301)  2026-02-09T16:06Z 145.1K followers, 12.3K engagements


"We know the banks in China hold $400b in foreign fx denominated bonds on their balance sheets (from the SCB fx balance sheet data) -- and those bonds could be held anywhere 5/"  
[X Link](https://x.com/Brad_Setser/status/2020892734509211799)  2026-02-09T16:09Z 145.1K followers, [----] engagements


"And it isn't an accident that state banks are now the focus -- that is now where the money is 10/10 https://www.cfr.org/articles/the-pboc-the-state-banks-and-backdoor-intervention https://www.cfr.org/articles/the-pboc-the-state-banks-and-backdoor-intervention"  
[X Link](https://x.com/Brad_Setser/status/2020894689465868295)  2026-02-09T16:16Z 145.1K followers, [----] engagements


"Germany didn't face the first China shock German exporters benefitted more than US exporters from China's stimulus after the global financial crisis. And Germany is now getting clobbered by the second China shock. Great chart from GS showing German IP high vs low China exposure. https://t.co/CLr40mW0jd Great chart from GS showing German IP high vs low China exposure. https://t.co/CLr40mW0jd"  
[X Link](https://x.com/Brad_Setser/status/2020982609908728073)  2026-02-09T22:06Z 145.1K followers, 26.1K engagements


"@stevehou home of the custodian clearstream"  
[X Link](https://x.com/Brad_Setser/status/2021193104464699885)  2026-02-10T12:02Z 145.1K followers, [----] engagements


"Apple's global iPhone profit shows up in the income data (as a result of a tax choice made by Apple); Apple Ireland's profit adds about $70b to the US FDI income surplus . A major culprit is the US doesn't include goods made and sold in China by US firms @LynAldenContact . Think about all those iPhones made in China sold in China and revenue sent back to Cupertino but not included trade data. According to the NY Fed: ".while the United States A major culprit is the US doesn't include goods made and sold in China by US firms @LynAldenContact . Think about all those iPhones made in China sold"  
[X Link](https://x.com/Brad_Setser/status/2021701455418171471)  2026-02-11T21:42Z 145.1K followers, 12.3K engagements


"@LordPos3idon CNY depreciated in real terms in [----] and again in January . so in my model given the lags they still get a boost supply constraints are pushing up the chip surplus as well KRW TWD JPY still at incredibly weak levels so disagree"  
[X Link](https://x.com/Brad_Setser/status/2021712105175429202)  2026-02-11T22:25Z 145.1K followers, [--] engagements


"Custodians in the UK and France (European financial centers) now hold $1 trillion in Treasuries and the combined holdings of Belgium and Luxembourg are similar in size 6/"  
[X Link](https://x.com/Brad_Setser/status/2020893114731241708)  2026-02-09T16:10Z 145.1K followers, [----] engagements


"Crazy export numbers out of Taiwan for January. Exports up 70% y/y in dollar terms. A close to $20b monthly trade surplus ($18.9b). Looks a bit like a big oil price run up for an oil exporter . 1/"  
[X Link](https://x.com/Brad_Setser/status/2020953790174900662)  2026-02-09T20:11Z 145.1K followers, 38.6K engagements


"Rather surprisingly China still had to warn its banks about holding too many Treasuries on their balance sheets per Bloomberg . (Something isn't quite adding up) Chinese Holdings of U.S. Treasuries plunge to lowest level since the Global Financial Crisis 🚨🚨 https://t.co/CnYYsTwrEt Chinese Holdings of U.S. Treasuries plunge to lowest level since the Global Financial Crisis 🚨🚨 https://t.co/CnYYsTwrEt"  
[X Link](https://x.com/Brad_Setser/status/2021035267092787448)  2026-02-10T01:35Z 145.1K followers, 17.3K engagements


"The offshore profits of Apple Microsoft big Pharma &others = the main reason why the US doesn't register how much it pays the rest of the world in interest (and it also starves the US of corporate tax revenue while providing Ireland and a few others with a windfall)"  
[X Link](https://x.com/Brad_Setser/status/2021702008147702133)  2026-02-11T21:44Z 145.1K followers, [----] engagements


"Persistent trade surpluses in most of Asia have generated big net asset positions and income surpluses in Taiwan and Japan . only China's bizarre (and likely fake) income deficit pull down the total. 4/"  
[X Link](https://x.com/Brad_Setser/status/2021703566251975164)  2026-02-11T21:51Z 145.1K followers, [----] engagements


"With a goods surplus (customs) of $1.5 to $1.6 trillion -- East Asia's total external surplus would be $2 trillion a year/ 2% of WGDP with a realistic Chinese income surplus. Watch for the q4 numbers out of China and Taiwan . 5/5"  
[X Link](https://x.com/Brad_Setser/status/2021703926572073035)  2026-02-11T21:52Z 145.1K followers, [----] engagements


"Bingo And the global trade surplus (ex pharma) is now primarily in China Taiwan and Korea . Important qualification to the now standard argument the dollar has gotten weaker (which is true primarily if the clock starts at the end of [--] not the middle of 24) Against the USD the JPY and KRW are weak and with the CNY all three currencies are very cheap on a real effective exchange rate basis. Judged in those ways the TWD doesn't stand out. But it is also cheap because it hasn't moved despite the CA surplus surging to over 20% of https://t.co/90C0gzA3F1 Against the USD the JPY and KRW are weak"  
[X Link](https://x.com/Brad_Setser/status/2021990998491247060)  2026-02-12T16:53Z 145.1K followers, [----] engagements

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