Treasury Bond Market Losing Ground Amid Rising Yields, Reduced Demand, and Uncertain Outlook

The Treasury bond market is losing its strategic footing economically, in policy, and technically, according to economist Mohamed El-Erian.

Long-term Treasury yields are hovering near 5% amidst a massive US bond sell-off partly due to a strong economy requiring extended tightening.

The Fed is no longer buying Treasurys and is shrinking its balance sheet, reducing demand.

Foreign buyers have become more hesitant to purchase US debt recently.

Short-term investors have held back extreme volatility, but the market's continued resilience is uncertain, El-Erian says.