According to @KobeissiLetter, foreign holdings of US Treasuries experienced a significant decline of $49.7 billion in December 2024, marking the largest drop since March 2021. This follows a $30.0 billion reduction in November, indicating a continued trend of foreign investors divesting from US federal debt. This consecutive selling trend could impact USD liquidity and influence Treasury yields, which are crucial for traders monitoring interest rate movements.

According to The Kobeissi Letter, while the refund is not contributing to deficit spending, it does not assist in reducing the US deficit either. The $400 billion, equivalent to approximately 22% of the FY2024 US deficit, could have been allocated for debt reduction, which is crucial for improving the country's fiscal health and indirectly impacting inflation control through stronger fiscal discipline.