“Denmark’s funding in U.S. Treasury bonds, like Denmark itself, is irrelevant,” U.S. Treasury Secretary Scott Bessent instructed reporters at Davos on Wednesday.
The “promote America” commerce was in full swing Tuesday after President Donald Trump and European leaders escalated tensions over Greenland. U.S. shares and bond costs tumbled, sending yields spiking.
It comes as Trump’s threats to impose 10% tariffs on eight European international locations as a part of his push to take over Greenland spooked markets. The levies would come into power on Feb. 1, Trump stated, and later rise to 25%.
Europe’s holdings in U.S. treasuries, nonetheless, have been tipped as a possible countermeasure.
Danish pension operator AkademikerPension stated Tuesday it was promoting $100 million in U.S. Treasurys. The choice was pushed by “poor [U.S.] authorities funds,” stated Anders Schelde, AkademikerPension’s investing chief.
When Bessent was requested how involved he’s about European traders pulling out of treasuries, Bessent stated at a press convention on the World Financial Discussion board: “Denmark’s funding in U.S. Treasury bonds, like Denmark itself, is irrelevant.”
“That’s lower than $100 million. They have been promoting Treasuries for years, I am not involved in any respect.”
Bessent added that the U.S. has had “document overseas funding” in its Treasurys.
He recommended that the Japanese bond sell-off following the announcement of a snap election within the island state, has “spilled over to different markets.”
The “notion that Europeans could be promoting U.S. belongings got here from a single analyst at Deutsche Financial institution,” Bessent stated, which was then amplified by “the pretend information media.”
The Jan. 18 be aware acknowledged that the “US has one key weak spot: it depends on others to pay its payments by way of massive exterior deficits.” On the time, European international locations held $8 trillion of U.S. bonds and equities.
“In an setting the place the geoeconomic stability of the western alliance is being disrupted existentially, it’s not clear why Europeans could be as prepared to play this half,” stated George Saravelos, international head of FX analysis on the German financial institution.
He added, “Danish pension funds have been one of many first to repatriate cash and cut back their greenback publicity this time final 12 months. With USD publicity nonetheless very elevated throughout Europe, developments over the previous couple of days have potential to additional encourage greenback rebalancing.”
Bessent instructed reporters on Wednesday that the CEO of Deutsche Financial institution known as to say that the German financial institution “doesn’t stand by that analyst report.”
A Deutsche Financial institution spokesperson instructed CNBC that the corporate usually doesn’t touch upon “potential communication between the financial institution and authorities representatives.”
“As a matter of long-standing coverage, Deutsche Financial institution Analysis is impartial of their work, subsequently views expressed in particular person analysis notes don’t essentially signify the view of the financial institution’s administration,” the spokesperson stated.
Europe ought to ‘sit down and wait’ for Trump
The U.S. has deemed Greenland a nationwide safety concern because the Arctic warms and new commerce routes emerge, opening the ground for a possible energy play between the U.S., Russia and China. The Trump Administration has stated it desires to keep away from that battle.
“We’re asking our allies to know that Greenland must be a part of the USA,” Bessent instructed reporters.
″[We have] all the time thought-about ourselves as an ally of the U.S. and have tried to accommodate the wants from the U.S. over time and executed so fortunately,” Nathanielsen stated by way of video name.
“To hastily discover ourselves within the midst of a storm that is about buying us like a product or a property, it is actually tough for us — to not point out the threats of navy motion and an precise occupation of our nation.”
Politicians on the island have stated Greenland is open for enterprise — however it’s not on the market.
Bessent added that U.S. purchased the U.S. Virgin Islands from Denmark through the First World Warfare as a result of they “understood” the islands’ significance.
“President Trump has made it clear that we are going to not outsource our nationwide safety or our hemispheric safety to another international locations,” Bessent stated. “Our associate, the U.Okay., is letting us down with the bottom on Diego Garcia, which we had shared collectively for a lot of, a few years, and so they need to flip it over to Mauritius. So, President Trump is critical right here.”
“Simply as I stated after liberation day final 12 months, I’d inform everybody, ‘take a deep breath, should not have this reflexive anger that we have seen, and this bitterness.’ Why do not they sit down and watch for President Trump to get right here and hearken to his argument, as a result of I feel they’re going to be persuaded.”
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— CNBC’s Sam Meredith contributed to this report.
