Dalio, survey flag more pressure in U.S. Treasuries

Ray Dalio warned that the slump in the U.S. Treasuries market may be far from over, arguing that the bond bear market probably has a long way to go. In a recent LinkedIn post, he said the United States is entering a phase in which an expanding supply of bonds is driving up yields, raising borrowing costs and adding to already elevated debt levels.

Dalio described a feedback loop in which higher yields increase the cost of financing government and corporate borrowing, which in turn contributes to further bond issuance. He said this dynamic is unlikely to end until higher interest rates weaken the economy and financial markets enough to bring bond supply and demand back into balance.

He also pointed to mounting sovereign debt refinancing needs and waning international interest in U.S. Treasuries as forces that could deepen the downturn. In his view, surging government and corporate borrowing is colliding with weakening demand from some of the world’s biggest traditional buyers of U.S. sovereign obligations.

Given these macro forces, Dalio argued that conditions currently favor short positioning rather than long exposure in U.S. government bonds. He framed this as a consequence of structural imbalances in the market that, in his assessment, have yet to be resolved.

While Dalio highlighted risks in Treasuries, a separate global fund manager survey showed that many investors are closely watching yield levels as a trigger to increase bond allocations. In Bank of America’s (BAC) October survey, 37% of respondents said they would consider rotating from stocks into bonds once the 10-year Treasury yield reaches 6%.

Another 14% of surveyed investors pointed to a 6.5% 10-year yield as their threshold for shifting from equities into fixed income. At the same time, 19% said yields are already high enough to justify a move into bonds, indicating that a notable minority sees current levels as sufficiently attractive.

The survey is described as one of the most followed by market participants, underscoring how these thresholds may influence portfolio flows. The results suggest that a further rise in yields could prompt a more material reallocation toward Treasuries from global fund managers.

The debate over Treasuries comes as the 10-year U.S. yield trades near multi-decade highs. The yield recently hit a 24-year peak of 5.365% and was around 5.21% on October 13, 2026, placing it closer to the levels many investors cited as a tipping point for buying bonds.

Market participants are also monitoring higher oil prices and the risk that inflation remains elevated, factors that can push yields higher if investors anticipate more restrictive monetary policy. September U.S. consumer inflation data due on Wednesday were flagged as an important catalyst for where yields might head next.

These developments leave investors braced for continued volatility in the Treasury market. Dalio’s warning about structural pressures on bonds, combined with survey evidence on yield thresholds for reallocation, highlights the potential for further swings in both fixed income and equity markets as new data emerge.