(Bloomberg) -- DoubleLine Capital’s Jeff Sherman said he remains bearish on long-term Treasuries, arguing that heavy government borrowing and weakening demand will continue to pressure the market.
Treasuries rallied Thursday as haven demand returned amid concerns about the artificial-intelligence trade and turmoil in the French market. But the rebound from “oversold” levels hasn’t altered the fundamental pressures facing longer-dated debt, Sherman, deputy chief investment officer at DoubleLine, said on Bloomberg Television.
“We continue to be significantly underweight in most portfolios, if not short the back end of the curve, because ultimately the pressures will materialize,” Sherman said.
Rising yields in markets such as Japan have intensified global competition for capital, reducing overseas demand for Treasuries, he added.
Sherman also criticized Treasury Secretary Scott Bessent’s efforts to talk down yields. “He is using these very aggressive words, like ‘I am the house, I have information you don’t,’” Sherman said. “The market hasn’t responded well to that.”