Dalio Warns U.S. Treasury Selloff Is Far From Over: Massive Issuance and Weakening Buyer Demand Intensify Debt Pressure

BlockBeats news, October 14: Ray Dalio, founder of Bridgewater Associates, warned in a LinkedIn post on Tuesday that the U.S. Treasury market is facing dual pressures from continuously increasing bond supply and weakening investor demand, and the bond bear market may persist. He pointed out that as the U.S. government issues new debt on a massive scale, yields may rise further, pushing up government financing costs and worsening the debt burden, creating a vicious cycle.

Dalio estimated that the United States needs to refinance about $10 trillion in maturing debt this year, while also adding about $2.1 trillion in new borrowing. At the same time, high-capital-expenditure sectors such as AI are also competing for funds, and corporate bond financing is further intensifying the competition for capital. He also warned that if traditional overseas buyers such as Japan reduce their allocations to U.S. Treasuries, the supply-demand imbalance could worsen further, and he views pressure in the corporate credit market as an early signal of tightening liquidity.

Dalio said that unless high interest rates cause enough shock to the real economy and financial markets to force a rebalancing of capital supply and demand, debt pressure will be difficult to ease. He has long been bearish on U.S. Treasuries and tends to advise investors to reduce bond holdings and increase gold holdings. The report noted that the U.S. Treasury benchmark index has fallen about 2.4% year to date, and the market is facing the risk of its first annual decline since 2022.