Who Owns the Majority of U.S. Debt: Domestic and Foreign Holders

Americans own the majority of U.S. debt. Domestic holders — the Federal Reserve, U.S. banks, mutual funds, pension plans, individual investors, and federal trust funds — together hold roughly two-thirds of the roughly $38.8 trillion in federal debt outstanding as of February 2026.¹ Foreign governments and international investors hold the rest, about $9.3 trillion, which works out to less than a quarter of the total.²

How the Debt Is Divided

Federal debt sits in two buckets. About 80 percent, roughly $31.1 trillion, is debt held by the public: every dollar the Treasury has borrowed from someone other than itself, including U.S. individuals, U.S. institutions, the Federal Reserve, and foreign investors. The other 20 percent, about $7.7 trillion, is intragovernmental holdings — money the federal government owes to its own trust funds.¹

Both buckets count as debt the government has to pay back. Neither the trust funds nor foreign creditors are close to being the largest single owner.

Domestic Holders: The Largest Share

The Federal Reserve

The Federal Reserve is the biggest single holder of publicly traded Treasury debt. As of late February 2026, the Fed held roughly $4.3 trillion in Treasury securities.³ The Fed buys and sells Treasuries as its main tool for managing interest rates and the money supply. When it buys, cash flows into the banking system; when it lets securities mature without replacing them, cash is pulled back out.

That second process has been running since mid-2022, when the Fed began shrinking the large portfolio it built during the pandemic. Its holdings relative to the size of the economy fell by about 14 percentage points between March 2022 and December 2025.⁴

U.S. Institutions

Mutual funds and private pension funds together hold hundreds of billions of dollars in Treasuries, using them as a stable base for retirement portfolios. Commercial banks buy them to meet regulatory liquidity requirements and to protect depositor funds. Insurance companies favor longer-term Treasury bonds because the payout schedule matches the claims they expect to pay decades out. For all of these institutions, Treasuries are attractive because they carry virtually no credit risk.

Individual Investors

Individuals can buy Treasury securities directly from the government through TreasuryDirect, with electronic savings bonds starting at $25.⁵ Annual purchase limits apply. Each person can buy up to $10,000 in electronic Series I savings bonds per calendar year, for example.⁶ Retail ownership provides a steady stream of domestic capital that is less sensitive to global market swings.

Foreign Holders

Foreign governments, central banks, and international investors hold about $9.3 trillion in Treasury securities, based on Treasury International Capital data for December 2025.² That is a large sum in absolute terms, but it is still a minority share of the total debt.

The largest foreign holders are:

Japan: about $1.19 trillion
United Kingdom: about $866 billion
China: about $684 billion
Luxembourg: about $435 billion, largely reflecting international investment funds domiciled there

China’s position has declined notably over recent years as its central bank has diversified reserves into other assets.²

Foreign central banks hold Treasuries for their liquidity and safety. The U.S. Treasury market is the deepest and most active bond market in the world, so securities can be sold quickly when a central bank needs cash during a financial emergency. The backing of the U.S. government makes them among the safest assets available.⁷ Strong foreign demand also helps keep U.S. borrowing costs lower than they would be if the government relied only on domestic buyers.

The Government Owes Itself About $7.7 Trillion

The other major domestic owner is the federal government itself. When programs like Social Security collect more in payroll taxes than they pay out, the surplus is invested in special-issue Treasury securities. The Treasury uses that cash for general operations and records an obligation to repay the trust funds later with interest. These internal securities do not trade on the open market, but they are binding commitments.

The Social Security trust funds are by far the largest holder in this category. At the end of 2024, the Old-Age and Survivors Insurance (OASI) trust fund held about $2.54 trillion and the Disability Insurance (DI) trust fund held roughly $183 billion, for a combined balance of about $2.72 trillion.⁸ Federal employee retirement funds managed by the Office of Personnel Management and the Military Retirement Fund make up much of the rest.

One boundary is worth flagging, because it’s a common source of confusion. Social Security is now paying out more than it collects, so its reserves are shrinking. The Congressional Budget Office projects the OASI trust fund will be exhausted by 2032 and the combined OASI and DI funds by 2033.⁹ Exhaustion does not mean benefits disappear. Ongoing payroll tax revenue would still cover roughly three-fourths of scheduled benefits without further legislative action.¹⁰

Why the Ownership Mix Matters

Who owns the debt shapes what happens when it has to be serviced. Every dollar borrowed carries an interest cost, and those costs have grown into one of the largest items in the federal budget. The CBO projects net interest of roughly $1.04 trillion for fiscal year 2026, equal to about 3.3 percent of GDP.¹¹ Interest now accounts for roughly 14 percent of all federal spending.¹²

When domestic investors hold the debt, those interest payments circulate back through the U.S. economy. When foreign investors hold it, the payments flow abroad. Economists gauge sustainability by comparing the debt to the size of the economy. Debt held by the public is projected to equal 101 percent of GDP in 2026 and to reach 120 percent by 2036.¹¹ A rising ratio means the debt is growing faster than the economy’s ability to support it, which can push interest rates higher and squeeze other government spending over time.

1
U.S. Treasury Fiscal Data. Debt to the Penny
2
Treasury International Capital. Major Foreign Holders of Treasury Securities
3
FRED – Federal Reserve Economic Data. U.S. Treasury Securities Held by the Federal Reserve – All – Wednesday Level
4
The Fed. A Decomposition of Balance Sheet Reduction
5
TreasuryDirect. Manage Bonds – TreasuryDirect
6
TreasuryDirect. How Much Can I Spend/Own?
7
Federal Reserve Bank of New York. The Important Role of the Foreign Investor in the U.S. Treasury Market
8
Social Security Administration. Trustees Report Summary
9
CBO.gov. Social Security Trust Funds Baseline
10
Social Security Administration. Proposals to Change Social Security
11
Congressional Budget Office. The Budget and Economic Outlook: 2026 to 2036
12
U.S. Treasury Fiscal Data. Federal Spending