Dalio Warns U.S. Treasuries Face More Turmoil as China, Japan Demand Wanes

Bridgewater Associates founder Ray Dalio warned Tuesday that the U.S. Treasury market could face further turbulence this year if Chinese and Japanese demand for U.S. government debt weakens, saying both creditors are "starting to feel the pressure." Japan, which spent heavily to shore up its economy, now wants to recover some of those funds, Dalio told Bloomberg. He cited geopolitics as an additional risk, noting China does not want to keep accumulating Treasuries. "When you have both a debtor and creditor relationship and an adversarial relationship, that's a very difficult situation," he said. Dalio repeated his warning that the U.S. could face a debt crisis within three years. His remarks came as global government bonds, including Treasuries, were sold off, pushing borrowing costs to multiyear highs. The selloff eased Tuesday, lifting U.S. stocks broadly higher. The 10-year Treasury yield fell 3 basis points to 5.281%, while the 30-year yield was nearly flat at 5.655%. Both had climbed Monday to levels unseen since 2002.