Bond selloff persists as Pimco warns of 6% Treasury yields

Dan Ivascyn, Pimco's chief investment officer, told the FT that a rise from the current 5.29 per cent to 6 per cent, a level last seen 26 years ago, is "feasible". He says hedge funds and other leveraged investors are being forced out of losing bond bets after weeks of selling in the $32tn market. If yields reach 5.5 per cent or more, he expects "decent weakness" in credit and equities. Data published on Thursday, 8 October, showed the 30-year US mortgage rate averaging 7.4 per cent, the highest since 2023, and yields on the lowest-rated corporate bonds hit 17 per cent, the highest since May 2020. Ivascyn adds that high yields will eventually draw investors into Treasuries, which would limit the rise; this week's auctions drew robust demand.