DoubleLine Capital Maintains Bearish View on Treasuries
The firm remains cautious on government debt while pivoting toward higher-yielding opportunities in the technology sector.
Updated on Oct. 22, 2026 in Corporate Finance
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Deputy Chief Investment Officer Jeff Sherman says DoubleLine Capital is holding short or underweight positions on the back end of the Treasury curve. The firm cites persistent pressure from heavy government borrowing and weakening investor demand.
Why it matters
Rising yields in Japan and global market volatility create increased competition for capital, challenging the stability of U.S. government debt. Concerns regarding aggressive capital spending on artificial intelligence initiatives further complicate the outlook for long-term Treasury investors.
DoubleLine Capital is currently targeting debt investments offering yields between 12% and 15%. This strategy follows recent selloffs in the tech sector, contrasting with the firm's bearish outlook on long-term government bond performance.
The players
Jeff Sherman
He serves as the deputy chief investment officer at DoubleLine Capital, a major investment management firm specializing in fixed-income securities.
DoubleLine Capital
This investment firm is a prominent manager of mutual funds and institutional accounts, widely known for its expertise in mortgage-backed securities and fixed-income strategy.
CoreWeave Inc.
The company is a specialized cloud provider that has become a significant player in the infrastructure market supporting artificial intelligence and high-performance computing.
Meta Platforms Inc.
This technology conglomerate operates major social media platforms and has recently increased its capital allocation toward generative artificial intelligence infrastructure.
The details
While maintaining a cautious stance on government bonds, the firm is actively acquiring specific debt within the technology sector. Recent market activity reflects this environment, as CoreWeave Inc. bonds saw price declines and Meta Platforms Inc. credit risk hit record highs.
Timeline
CoreWeave Inc. bonds experienced price declines during the week of October 12, 2026.
Treasuries rallied and Meta Platforms Inc. credit risk reached a record high on October 22, 2026.
Market Dynamics
The firm's bearish stance on Treasuries reflects a broader global shift driven by the Bank of Japan's yield curve control policy. This structural change in international markets forces investors to seek higher returns elsewhere as government borrowing costs face renewed pressure.
Retail investors should note that the current environment favors higher-yielding corporate debt over traditional long-term government bonds. This strategy necessitates a closer look at the credit risk associated with technology companies as capital spending on AI initiatives intensifies.
The takeaway
Investors are increasingly prioritizing high-yield corporate debt as government bond demand weakens amid global borrowing pressures. Diversifying away from long-term Treasuries into specific tech sector opportunities may offer better risk-adjusted returns in the current climate.
Further reading
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