Ray Dalio warns U.S. Treasury bond selloff far from over: Massive debt issuance and weakening buyer demand exacerbate debt pressure.

Bridgewater Associates founder Ray Dalio warned in a LinkedIn post on Tuesday that the US Treasury market is grappling with dual headwinds: a sustained rise in bond supply and weakening investor demand, signaling the bond bear market is likely to persist. He pointed out that as the US government floods the market with new debt, yields could climb further, driving up government financing costs and amplifying the debt burden, thus forming a vicious cycle. Dalio estimated that the US will need to refinance roughly $10 trillion in maturing debt this year, while also issuing around $2.1 trillion in new borrowings. Meanwhile, high-capital expenditure sectors such as AI are also vying for capital, and corporate bond issuance is further intensifying competition for funds. He also cautioned that if traditional overseas buyers like Japan cut back on their US Treasury holdings, the supply-demand imbalance could deepen, and he sees stress in the corporate credit market as an early indicator of tightening liquidity. Dalio noted that unless high interest rates deliver sufficient shocks to the real economy and financial markets to force a rebalancing of capital supply and demand, the debt pressure will remain hard to ease. He has long held a bearish outlook on US Treasuries and tends to advise investors to trim their bond holdings and increase gold positions. The report adds that the benchmark US Treasury index has dropped approximately 2.4% so far this year, putting the market at risk of its first annual decline since 2022.