Foreign Buyers Losing Appetite for US Debt

Famed economist Mohamed El-Erian is warning of more pain to come for bonds. According to him, US yields have further to climb due to a decline in foreign demand for US Treasurys.

The main reason for this decrease in demand lies in geopolitical issues affecting prominent foreign buyers such as China and Japan.

China's holdings of US Treasurys fell to an 18-year low in June, while Japan recently sold some of its US debt holdings to prop up the yen.

Norway's sovereign wealth fund has proposed slashing its allocation to bonds this week, which would mainly impact its holdings of US Treasurys.