El-Erian Warns Global Bond Sell-Off Will Deepen as G7 Yields Hit Multi-Decade Highs
Updated
Updated · CNBC · Sep 4
El-Erian Warns Global Bond Sell-Off Will Deepen as G7 Yields Hit Multi-Decade Highs
3 articles · Updated · CNBC · Sep 4
Summary
Mohamed El-Erian said investors should expect further losses in global government bonds, arguing U.S. yields still face upward pressure even after Friday's rout briefly cooled.
U.S. fiscal policy is the main driver, he said: Washington shows no appetite for near-term consolidation, while government, corporate and hyperscaler issuance now exceeds the pool of dependable buyers.
Traditional Treasury holders are becoming less reliable, El-Erian said, citing weaker demand from China, domestic constraints in Japan and Gulf states, and Norway's sovereign wealth fund rethinking U.S. bond allocations.
Among the G7, he flagged the U.K., Japan and France as most vulnerable to sovereign debt stress, adding that France has overtaken Italy as a eurozone bond-market focal point.
El-Erian also criticized the Trump administration's market interventions — including larger long-dated Treasury buybacks and pressure on the Fed — as a step too far in a market too large to steer durably.