US total net Treasury International Capital (TIC) flows fell to $44.9bn in December, down from $212bn the month before. The data tracks cross-border purchases and sales of US long-term securities, as well as banking flows.
The December figure suggests much lower net foreign demand for US assets than in the prior month. The report includes both private and official flows.
Foreign Appetite For Us Assets
Foreign investment flows into the U.S. dropped sharply in December 2025, falling to $44.9bn from a very strong $212bn in November. This big slowdown suggests global investors became more cautious heading into 2026. It also raises questions about how attractive U.S. assets will be in the weeks ahead.
Lower demand for U.S. assets can put downward pressure on the dollar. The U.S. Dollar Index (DXY) has already looked softer this year and failed to clearly break above 104 in late January and early February. One way to position for a potential move lower is to consider put options on dollar-tracking ETFs like UUP, targeting a possible drop toward the 102 support area seen last fall.
If foreign buyers purchase less U.S. government debt, Treasury yields may need to rise to pull in more domestic demand. The 10-year Treasury yield has already climbed from about 3.9% to above 4.1% since the start of the year, which may reflect weaker foreign demand. A direct way to express a view that yields could keep rising is to consider put options on long-term Treasury ETFs such as TLT.
Volatility Hedging Considerations
A sharp pullback in capital inflows can sometimes come before a jump in stock-market volatility. During the 2022–2023 rate-hike cycle, periods of weaker foreign inflows often lined up with S&P 500 pullbacks. As a hedge against a possible correction, it may be prudent to consider call options on the VIX index with March or April 2026 expirations.
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