Norway's Government Pension Fund Global, the world's largest sovereign wealth fund, has formally recommended cutting its government bond allocation by 20 percentage points, from 70% to 50%. US Treasuries would absorb the largest share of that reduction. The recommendation came jointly from Norway's central bank governor and the fund's chief, giving it significant institutional weight.
If the fund follows through, it would be one of the largest single institutional shifts away from US Treasuries in years. Reduced demand from a buyer of this scale puts upward pressure on Treasury yields, which raises borrowing costs across the economy and compresses valuations on equities, particularly long-duration growth stocks. Bond ETFs and Treasury-heavy portfolios face direct headwinds.
July 2025: Norway's parliament is expected to review the fund's investment mandate. Next US Treasury auction schedule: 2-year and 5-year auctions typically fall in the last week of each month.
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