El-Erian Flags Fundamental Imbalance in Bond Market After Weak September Jobs Report

Yahoo Finance·2 Oct 2026·

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Summary · why it matters

The US labor market added just 29,000 nonfarm payroll jobs in September, according to the US Bureau of Labor Statistics, far below economists' forecasts of 90,000. Allianz chief economic adviser and Wharton School professor Mohamed El-Erian told The 8:30 that the weak print should bring a retracement in yields for now, but that the bond market's core problem is a fundamental imbalance between those issuing longer-term bonds, such as hyperscalers and the government, and those buying them. El-Erian said reliable buyers including the Gulf countries, China, Norway and Japan have stepped back for their own domestic reasons, leaving hedge funds to fill the gap and injecting volatility into a market he says overshot on the way up. He noted that longer-dated TIPS yielded over 3% yesterday, a guaranteed 3% return over inflation at levels not seen for decades, and said that while some investors may rotate from stocks into bonds, professionals will wait until speculative elements are washed out of the market.