2014 will be an important year for the US Treasury market. After a $5794.9 billion historic high for the US Treasury market in 2013 speculations as to market demand have increased following news that China will slow down its US debt buying practices. In December China sold off close to $50 billion in US Treasury paper dropping its holding of US debt to $1.27 trillion. The news is significant because Yi Gang an official of PBoC has indicated that China no longer benefits from increasing its foreign reserves. Holdings of US debt have been a way for China to keep the value of the Yuan low and keep export levels high. However China’s exports have been falling consistently over the last couple years and as China develops and wages rise it won’t make sense to keep the value of the yuan too low. If China truly intends to stop purchasing large quantities of US treasury’s that means that the US will have to raise the rates on its debt ceteris paribus. Meaning that the government may turn to increasing taxes to finance expenses.