Mohamed El-Erian says the global bond sell-off likely still has more room to run.
Why it matters: Higher bond yields raise borrowing costs for mortgages, corporate debt, and government financing. The pressure is global, with moves in U.S., Japanese, German and U.K. debt markets.
- El-Erian said government issuance is outpacing the pool of reliable buyers, keeping upward pressure on yields.
- He said the U.S. Treasury had gone 'a step too far' in its market intervention.
- The CNBC interview was published Sept. 4, 2026, from the Ambrosetti Forum in Cernobbio, Italy.
- Recent moves pushed the 10-year U.S. Treasury yield to about 4.8%, while Japan's 10-year yield crossed 3% for the first time since 1996.
Mohamed El-Erian said the global government bond sell-off is likely not over, arguing that yields still face upward pressure as issuance swamps demand. He said the amount of borrowing coming from governments, hyperscalers and companies "far exceeds what you can count on in terms of reliable buyers."
The Allianz chief economic advisor made the comments in a CNBC interview published Sept. 4, 2026, from the Ambrosetti Forum in Cernobbio, Italy. The discussion came as bond markets in the U.S., Japan, Germany and the U.K. have all come under pressure. A Yahoo Finance republish of the interview said the sell-off is global, not just a U.S. story.
El-Erian also said the U.S. Treasury had gone "a step too far" in its market intervention, warning that trying to impose market outcomes can create unintended consequences.
The move higher in yields has been sharp. The 10-year U.S. Treasury yield is around 4.8%, while the 10-year Japanese government bond yield has crossed 3% for the first time since 1996. The 10-year German Bund yield has hit its highest level since 2011.
Higher sovereign yields matter well beyond bond traders. As AP noted, they feed through to mortgage costs, corporate borrowing and government financing.
By the numbers
- 4.8% - roughly where the 10-year U.S. Treasury yield sits
- 3% - level crossed by the 10-year Japanese government bond yield for the first time since 1996
- 2011 - the last time the 10-year German Bund yield was this high
Yes, but: El-Erian's warning is a market call, not a certainty - bond yields can reverse if inflation, growth or policy expectations change.