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BondsMediumUpdated•Originally published 5 September 2026•Updated 5 September 2026•
2 min read

Norges Bank Proposes About $80 Billion Cut to US Treasury Holdings

Key Facts

1The proposal could cut US Treasury holdings by about $80 billion from roughly $215 billion, but it has not yet been approved.
2Norges Bank recommends cutting government bonds in the benchmark from 70% to 50%.
3US government debt would fall from 34.1% to 21.9%, while US non-government debt would rise from 16.2% to 27.6%.
4The fund was worth NOK 22.683 trillion on June 30, 2026, with fixed income accounting for 25.8%.

Norges Bank has recommended reshaping the Government Pension Fund Global’s bond benchmark, a change that could reduce its US Treasury holdings by about $80 billion from roughly $215 billion at the end of June. The figure is an estimate and the proposal still requires a decision by Norway’s Finance Ministry, so it is not yet an approved sale programme.

The September 1 submission recommends cutting government bonds in the fixed-income benchmark from 70% to 50% and replacing GDP-based country weights with market-value weights. It would broaden the other half to include securitized debt, including agency mortgage-backed securities, and government-related bonds. If the ministry agrees, Norges Bank would submit an implementation plan and phase in the changes to limit market impact and transaction costs.

Published calculations indicate that US government bonds would fall from 34.1% to 21.9% of the bond index, while US non-government debt would rise from 16.2% to 27.6%. The benchmark’s overall dollar weight would edge down only from 52.9% to 52.5%, making the proposal more a change in the mix of US credit than a broad retreat from dollar assets.

The fund was worth NOK 22.683 trillion on June 30, 2026, with fixed-income investments accounting for 25.8% of its value. A benchmark change at that scale could generate substantial flows, but Norges Bank has stressed that any transition would be gradual.

Agency MBS would represent about 13% of the proposed benchmark. Norges Bank estimates that the market had about $7.5 trillion outstanding at the end of 2025 and average daily turnover of roughly $350 billion. The securities are guaranteed by Fannie Mae, Freddie Mac and Ginnie Mae and have credit quality close to US government bonds, but investors bear prepayment risk when borrowers refinance at lower rates.

Norges Bank says the broader benchmark could marginally raise expected risk-adjusted returns while broadly preserving liquidity and the role of bonds in reducing portfolio volatility. The next step is a Finance Ministry decision, not an imminent sale timetable or a prospective response from the US Treasury.