The Canadian Pension Plan Investment Board expressed caution on Thursday about investing in government bonds in the short term – an ominous sign as governments need buyers to fund ambitious spending plans and burgeoning debts.

The Canadian Pension Plan benefited from a significant increase in the value of its government bond holdings for the year just ended. But David Denison, president and chief executive officer, said: “Our view is that all that supply will only meet willing buyers if yields go up. It would be dangerous to increase the fixed-income portion of our portfolio at this point.”