Billionaire investor Ray Dalio warns the US bond selloff has "a long way to go" as expanding government and corporate borrowing meets weakening demand. In a LinkedIn post, Dalio says the US is entering a phase where rising bond supply drives up yields and borrowing costs, fueling a debt spiral. He argues this will only end when higher rates weaken markets enough to restore balance.
Dalio, founder of Bridgewater Associates, has long advocated selling bonds and buying gold to hedge a looming debt crisis. His bearish outlook contrasts with bullish views from BlackRock and Morgan Stanley, who see opportunity near 5.4% 10-year yields. A Bloomberg index shows Treasuries down 2.4% this year as the Federal Reserve raises rates.
Dalio estimates US debt burden is at its highest since World War II, with $10 trillion in maturities and $2.1 trillion in new borrowing expected this year. He warns a funding gap could emerge if foreign creditors like China and Japan reduce holdings. Japanese policymakers may encourage domestic investors to repatriate capital.
Corporations selling debt for AI buildout add competitive pressure, which Dalio calls the "canary in the coal mine.".
Source: Bloomberg Markets · Summarized by HeadlinesBriefing