Double Line Capital's Jeff Sherman remains bearish on long-term Treasuries, citing heavy government borrowing and weakening demand as key pressures. Despite a recent rally driven by haven demand amid AI trade concerns and French market turmoil, Sherman argues fundamentals remain weak. As deputy chief investment officer, he maintains a significantly underweight position in most portfolios, even shorting the back end of the curve.
Rising yields in Japan and global capital competition are reducing overseas demand for Treasuries. Sherman criticized Treasury Secretary Scott Bessent's aggressive rhetoric, saying it hasn't resonated with investors. In credit markets, Sherman has started nibbling at some debt after the tech selloff, including Meta Platforms and AI infrastructure companies like Core Weave, where high yields (12-15%) provide protection against downside risk.
Source: Bloomberg Markets · Summarized by HeadlinesBriefing