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Sherman: Government Borrowing to Sink Bonds
22 Oct
Summary
- Heavy government borrowing is a key factor pressuring the bond market.
- Weakening demand for Treasuries is expected to continue.
- Treasuries saw a rally Thursday due to safe-haven demand.

DoubleLine Capital's Jeff Sherman expressed a persistently bearish outlook for long-term Treasuries.
Sherman attributes this negative sentiment to significant government borrowing activities coupled with diminishing investor demand. These factors are expected to exert continuous downward pressure on the bond market.
In contrast, Treasuries experienced a notable rally on Thursday. This upward movement was primarily fueled by a return of safe-haven demand among investors. The rally occurred against a backdrop of increasing concerns related to the artificial-intelligence trade, indicating a complex and shifting market environment.