Manager of Norway’s $2tn oil fund proposes slashing US Treasury holdings - Financial Times

Nicolai Tangen, the chief executive of Norges Bank Investment Management, has sparked debate by proposing a significant reduction in the fund’s allocation to US Treasuries. The suggestion, reported by the Financial Times, stems from concerns over the changing dynamics of the world’s primary reserve asset. For the Norwegian sovereign wealth fund—the largest of its kind—such a shift would represent a major strategic realignment, potentially reshaping global capital flows.

The proposal is not a reaction to short-term market volatility, but rather a structural critique. Tangen points to the increasing fiscal burden in the United States and the potential for prolonged inflation to erode the real value of fixed-income holdings. If enacted, the move would channel capital away from dollar-denominated debt into alternative assets, including equities and real estate, which the fund believes offer superior long-term risk-adjusted returns.

For investors, this signals a broader reconsideration of the "risk-free" status of US government bonds. While the fund has not yet made a final decision, its sheer scale means any implementation would be closely monitored. The key watchpoint is whether other major institutional holders follow suit, which could influence Treasury yields and the dollar’s valuation over the medium term.