According to CNBC, JPMorgan said the U.S. government's efforts to ease pressure in the Treasury market may only push the problem further out as heavy global debt issuance tests investor demand. James Sullivan, JPMorgan's co-head of global fundamental research, said the Treasury is effectively buying back longer-duration bonds while issuing shorter-dated bills, a move he compared to refinancing long-term obligations with short-term borrowing.

The U.S. Treasury Department, led by Secretary Scott Bessent, said Wednesday it would at least double the size of its government debt buybacks, starting Sept. 9 and running through Nov. 4. Sullivan said the intervention may help borrowing costs in the near term, but it does little to address the larger buildup of government and corporate debt that must find buyers.

He pointed to roughly $40 trillion in U.S. government debt and about $76 trillion across developed-market governments globally, along with record corporate bond issuance. JPMorgan said China’s holdings of Treasurys are at an 18-year low, while U.S. Treasury custody holdings for foreign governments are at their lowest in 14 years. The bank also said leading AI companies have issued $200 billion of debt so far this year, up 80% from a year earlier.

JPMorgan said higher bond yields could make fixed-income assets more competitive with equities, especially with stock valuations elevated. The bank said bond yields are now higher than the earnings yield on the S&P 500, making asset-allocation decisions more difficult.