Global bond sell-off likely not over yet, Mohamed El-Erian tells CNBC
In a wide-ranging interview, the renowned economist also said the U.S. Treasury had taken "a step too far" with its market intervention.
The recent global bond sell-off may still have further to go, according to Mohamed El-Erian, a well-respected economist. This assessment is significant as bond markets have been under considerable stress, with yields rising sharply in recent weeks. The sell-off has been driven by concerns over inflation and the prospect of central banks, particularly the US Federal Reserve, adjusting their monetary policies.
El-Erian's comments also touched on the US Treasury's role in the market. He suggested that the Treasury had overstepped with its market interventions, which could have implications for market dynamics and the effectiveness of future policy measures. The Treasury's actions have been closely watched by investors, as they seek to manage the government's borrowing needs while minimizing disruptions to the market.
Looking ahead, investors will be closely monitoring the US Treasury's issuance plans and the Federal Reserve's response to the current market conditions. The Fed's next policy meeting will be crucial in determining the trajectory of interest rates and the overall direction of bond markets. As such, market participants will be watching for any signals from the Fed on its plans for quantitative tightening or other measures that could impact bond yields.
Originally reported by cnbc.com. BondNews adds analysis for finance & markets readers.