"Bond Vigilantes Target US Treasury Market Amidst Turmoil"

Rising concerns over U.S. government spending and the growing budget deficit have led to a steep sell-off in the Treasury market, pushing prices to 17-year lows. Bond vigilantes, investors who punish governments by selling their bonds, are making a comeback as worries about increased deficit spending and debt issuance weigh on investor sentiment. The Federal Reserve's hawkish interest rate projections and anticipation of rising government spending have contributed to the selloff. The U.S. deficit is projected to rise to 6.3% of GDP this year, and Treasury auction sizes are expected to increase by 23% in 2024. While some believe bond vigilantes will have a significant impact, others argue that the Fed's influence and concerns over interest rates are the primary drivers of the selloff.