Bridgewater founder Ray Dalio said the US bond sell-off is far from over as
rising government and corporate funding needs and weaker demand from some
traditional buyers intensify pressure on Treasuries. He warned the US is
entering a phase in which higher bond supply will push yields up, and rising
borrowing costs will further enlarge debt — a cycle that would only end if high
rates weaken the economy and financial markets enough to rebalance supply and
demand. Dalio said US debt is at its highest level since WWII and is likely to
worsen in coming years. He noted the government expects to roll about $10 tln of
maturing debt this year and to add roughly $2.1 tln in new borrowing. He
cautioned demand from major foreign Treasury holders could weaken while
corporate bond and equity issuance to fund AI infrastructure competes with
Treasuries for capital. He also said signs in corporate credit show investors
are demanding higher returns to absorb new supply. Given rising supply and
weakening demand, Dalio said shorting Treasuries remains more attractive than
going long.
