Valuations are so elevated in the bond market that a mere 100 basis move would instigate a massive crash. Since, borrowing has expanded to nearly every sector due to ‘free money’ from the Fed and it's magical money tree that would mean every sector would be hit. Dalio mentions that :
"at current duration levels, a 1 percentage point increase in interest rates would lead to a decline of almost $1.2 trillion in the securities underlying the index."
This could be the greatest bond crisis in 40 years. Dalio further believes that the Fed will raise interest rates despite claims otherwise.
The levels of growing debt is not just the retail level or household debt but the massive of increase of corporate bond debt at historically low rates. It does not take much to double interest rates from 2% to 4%. That can happen in a couple years and that would be devastating to the market.