The New Treasury International Capital (TIC) Data
Changes to TIC data from the Treasury Department may improve transparency and consistency
The Treasury Department is in the process of making substantial changes to the collection and reporting of the TIC data. While we are still studying the new data and awaiting additional clarifications and disclosures from both the Treasury and other researchers, we expect these changes to substantially improve the quality and usability of the TIC data.
If nothing else we expect the changes in data collection will improve the consistency between the securities holdings and new transactions data. There is already some evidence of this in the latest data.
For now we continue to rely primarily on the holdings data and our own valuation adjustment process as we gain more familiarity with the new transactions data, but we are hopeful that realized and forthcoming changes will reduce the number of misleading quick takes on the TIC data among financial journalists and on social media.
What is changing with the TIC Data?
The Treasury Department is in the process of making substantial changes to the collection and reporting of the TIC data (link). This is important both because the TIC data provides the most high frequency (albeit still two months lagged) official reading on bilateral financial flows into and out of the US but also because the TIC data feeds more or less directly into the compilation of the US BoP/IIP by the BEA (link) as well as into the Flow of Funds (link), Enhanced Flow of Funds on International Portfolio Flows (link) as well as to the IMF’s CPIS (link).
As the TIC data records foreign holdings of and transactions in US Treasury securities (as well as Agency, corporate debt and equity securities)–including by reserve managers and SWFs (eg official investors)–it is also a crucial source of information on non-resident sources of financing for US government deficits (and private borrowing) as well as central bank allocations to USD denominated financial assets.
While we are still studying the new data and awaiting additional clarifications and disclosures from both the Treasury and other researchers (including at the Fed) the key changes (and continuities) in the data include: