World's biggest sovereign wealth fund plans to cut U.S. Treasury holdings

JUST IN: Norway's $2.3 trillion sovereign wealth fund, the world's biggest, plans to cut its US Treasury holdings and diversify into higher-risk, higher-return assets.

The world's biggest wealth fund is backing away from US Treasurys.

Norway's two point three trillion dollar oil fund wrote to its finance ministry proposing to cut government bonds from seventy percent of its debt holdings to fifty. In practice, Treasurys drop from about thirty four percent to under twenty two, while Japanese bonds and riskier US paper like corporate debt and even mortgage-backed securities get bumped up. Yes, the 2008 stuff. CEO Nicolai Tangen says as a long-term investor, the fund can carry that risk for better returns.

The money isn't the story, the signal is. Mohamed El-Erian put it plainly, the size isn't big, but traditional buyers of American debt are becoming less reliable, and Japan, China and the Gulf are already under pressure. All while long-dated yields sit at decade highs.

When the most patient money on earth wants less of your debt, that's a message Washington should read twice.

This is Sara White, reporting for HIT.