Geoffrey Fain Williams, Charles Dainoff, and Robert Farley
As the Greenland crisis came to a head in the days before Davos, Europeans sought tools that could be reforged as weapons against the Trump administration. On Jan. 18, Deutsche Bank’s global head of foreign exchange research, George Saravelos, warned clients in a note that “Europe owns Greenland, it also owns a lot of [U.S.] treasuries,” and that the EU might escalate the conflict with a “weaponization of capital” by reducing private and public holdings of U.S. debt instruments.
U.S. Treasury Secretary Scott Bessent reported later that week that Deutsche Bank no longer stood behind the analyst’s report, but Saravelos was far from the only financial analyst to discuss the idea. Within days, a few European pension funds eliminated or greatly reduced their holdings of U.S. Treasurys and—perhaps as a result—U.S. language about European strength became considerably less aggressive.
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