Harley Bassman warns of nightmare scenario amplifying US bond selloff
Summary
Harley Bassman, a pioneer of a key indicator for US Treasuries, has issued a warning that a little-noticed feature of the market could exacerbate a monthslong selloff, leading to even higher bond yields. This selloff is influenced by additional selling pressure from corporate debt tied to AI infrastructure and increased mortgage-related hedging. Moreover, major asset managers are shifting their investment strategies, favoring shorter-duration Treasuries and decreasing equity exposure as elevated yields persist, a trend also noted by other market figures like Ray Dalio, who have pointed out supply-demand imbalances in government bonds.
Analysis
Harley Bassman: Harley Bassman is a veteran fixed-income strategist widely known as the Convexity Maven for his work developing Treasury volatility indicators. He authors the Convexity Maven newsletter and frequently comments on bond market dynamics through podcasts and other channels. In this news, Bassman warns that features in Treasury futures settlement are poised to intensify the ongoing selloff and drive yields higher. Broader Warnings: Other market figures, including Ray Dalio, have highlighted ongoing supply-demand imbalances likely to sustain pressure on government bonds. Market Pressures: Corporate debt issuance tied to AI infrastructure and rising mortgage-related hedging are contributing additional selling pressure to US Treasuries. Investor Sentiment: Major asset managers are shifting toward shorter-duration Treasuries while reducing equity exposure as yields remain elevated.
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