The Treasury Standard

Methodology & Sources

FX Reserves (COFER): Quarterly data from the IMF Currency Composition of Official Foreign Exchange Reserves survey. 149 reporting economies. Starting 2025Q3, the IMF eliminated the "unallocated" category and now provides complete currency composition for 100% of global reserves. Prior to 2025Q3, shares reflect allocated reserves only (~90% of total). Exchange rate valuation effects can significantly distort quarter-to-quarter changes in currency shares — a large DXY decline mechanically reduces the USD share even if no central bank changes its portfolio.

FX Turnover (BIS Triennial): Conducted every three years in April. Shares sum to 200% because two currencies are involved in each transaction. Data from 52 jurisdictions covering 1,100+ dealers.

Debt Securities (BIS): Currency denomination of international debt securities outstanding. Quarterly. Includes all issuers and all maturities. Note: Only USD, EUR, and Other breakdown is available from the BIS bulk dataset at the aggregate level.

Foreign Holdings of Treasuries (FRED): Quarterly data from the U.S. Treasury via FRED. Foreign holdings (FDHBFIN, billions) divided by Federal Debt Held by the Public (FYGFDPUN, millions) gives the share of publicly held federal debt held by foreign and international investors. Using "Debt Held by the Public" as the denominator — rather than Total Public Debt (which includes ~$7 trillion in intragovernmental holdings) — provides a more meaningful measure of the foreign share of marketable debt. Unlike the BIS debt securities measure (which tracks currency denomination of international bonds), this captures foreign demand for U.S. sovereign debt specifically — a proxy for confidence in dollar-denominated safe assets. FDHBFIN typically lags one quarter behind FYGFDPUN. Available since 1970.

Federal Reserve Holdings of Treasuries (FRED): Quarterly data from FRED. Federal Debt Held by Federal Reserve Banks (FDHBFRBN, billions) divided by Federal Debt Held by the Public (FYGFDPUN, millions). The Fed's Treasury portfolio expanded dramatically during QE rounds (2009–2014, 2020–2022) and has been shrinking during quantitative tightening. Tracking the Fed share alongside the foreign share helps distinguish whether a declining foreign share reflects genuine diversification away from dollars or simply reflects growth of the Fed's balance sheet increasing the denominator's composition. Available since 1970.

Dollar Index (DTWEXBGS): Nominal Broad U.S. Dollar Index from the Federal Reserve, trade-weighted against a broad set of currencies.

Current Account Balance (% of GDP): U.S. current account balance from NIPA accounts (FRED series NETFI), expressed as a percentage of GDP. Quarterly, seasonally adjusted at annual rates. A persistent deficit reflects the U.S. role as supplier of the world’s primary reserve asset — foreigners accumulate dollar claims by running surpluses against the U.S.

Publicly Held Debt-to-GDP Ratio: Federal debt held by the public (FRED series FYGFDPUN, millions) divided by GDP (FRED series GDP, billions), expressed as a percentage. Quarterly. This measure excludes ~$7 trillion in intragovernmental holdings (e.g., the Social Security trust fund), focusing on the debt that markets actually price and that the Treasury must finance externally. This is the same denominator used in the foreign and Fed Treasury holdings charts. The series begins in 1970 (when FYGFDPUN starts), four years later than the old GFDEGDQ188S series. Rising debt-to-GDP ratios test the fiscal capacity that underpins Treasury demand. Hendrickson (2025) argues the system becomes fragile when debt levels erode confidence in the government’s ability to service obligations.

Federal Surplus/Deficit (% of GDP): Annual federal surplus or deficit as a percentage of GDP (FRED series FYFSGDA188S). While debt-to-GDP captures the stock of obligations, the deficit captures the flow — tracking the rate at which debt is accumulating. Jiang, Lustig, Van Nieuwerburgh, and Xiaolan (2026) identify the primary fiscal surplus as a key state variable for bond safety regimes. Persistent deficits signal deteriorating fiscal fundamentals that can erode safe-asset status over time.

r − g (Interest Rate vs. Growth Rate): The 10-year Treasury yield (FRED DGS10, quarterly average) minus the year-over-year nominal GDP growth rate (computed from FRED GDP). This spread is the central variable in debt sustainability analysis: when r > g persistently, the debt-to-GDP ratio rises even without new borrowing, requiring ever-larger primary surpluses to stabilize. Jiang et al. (2026) show that r − g drops sharply during wars (enabling debt reduction through financial repression) but that peacetime reversals can be abrupt. A sustained r > g regime threatens the fiscal capacity that underpins dollar safe-asset status.

Authors

Bryan Cutsinger

Bryan Cutsinger is an Assistant Professor of Economics at Florida Atlantic University and a fellow with the Sound Money Project at the American Institute for Economic Research. His research focuses on monetary theory and history, with emphasis on the institutional foundations of monetary systems and the political economy of central banking. He serves as Associate Editor of Public Choice and Director of Undergraduate Studies at FAU.

Joshua Hendrickson

Joshua Hendrickson is Professor and Chair of the Department of Economics at the University of Mississippi. He is a Senior Fellow with the Sound Money Project at the American Institute for Economic Research and a Senior Affiliate Scholar at the Mercatus Center at George Mason University. His research focuses on monetary theory and political economy, with recent work on nominal GDP targeting and the political economy of Bitcoin.