Jeff Sherman, deputy chief investment officer at DoubleLine Capital, said most of the firm’s portfolios remained significantly underweight long-dated U.S. Treasuries, reflecting concern about federal borrowing and weaker overseas demand.
In an Oct. 22 Bloomberg Real Yield interview, Sherman said some portfolios may be short at the back end of the yield curve. He also discussed Treasury Secretary Scott Bessent’s effort to talk down yields.
The U.S. Department of the Treasury’s daily par-yield curve showed the 10-year yield at 4.96% on Oct. 22, down from 5.13% on Oct. 21. The 30-year yield fell to 5.29% from 5.42%. Treasury describes these figures as indicative bid-side rates collected around 3:30 p.m. ET.
Treasury’s Aug. 3 estimate put privately held net marketable borrowing at $628 billion for the fourth quarter of 2026, assuming an $850 billion cash balance at year-end. Its estimate for the third quarter of 2026 was $739 billion.
Treasury’s foreign-holdings data listed Japan at $1.0683 trillion at the end of August, down from $1.1039 trillion at July’s end. The monthly figures do not show the reason for the decrease or measure daily purchases, so they do not establish October overseas demand.
The department said it expected to keep auction sizes for nominal coupon securities and floating-rate notes at then-current levels for at least the next several quarters, while adjusting bill sales as borrowing needs change. It also raised the maximum size of certain long-end liquidity-support buybacks from $2 billion to at least $4 billion per operation, effective Sept. 9 through Nov. 4. Treasury said it did not expect the buybacks to materially alter privately held net marketable borrowing, as new securities would replace those purchased.
The next financing update is scheduled for Nov. 2, when Treasury is due to release a borrowing estimate. Its quarterly refunding announcement is set for Nov. 4.
