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Bond Vigilantes

All articles tagged with #bond vigilantes

economy2 years ago•6 min saved

The Impact of the US Government's Budget Deficit on Bond Traders

Bond traders, known as "bond vigilantes," are expressing concern over the US government's growing budget deficit and national debt. These traders believe that the government is issuing too much public debt through bonds, which investors may not be willing to absorb in an environment of elevated inflation and high interest rates. The deficit currently stands at roughly $67 billion for the current fiscal year, and the Congressional Budget Office estimates it to be $1.5 trillion for the full 2023 budget year. Bond vigilantes protest by selling bonds, causing yields to rise. The traders argue that the government's fiscal situation is unsustainable, given the record levels of debt-to-GDP ratio and the expectation of further increases.

via CNN|

#bond-traders #bond-vigilantes #budget-deficit

finance2 years ago•3 min saved

"The Resurgence of the Bond Vigilante: Insights from UBS Strategist"

Bond vigilantes, investors who protest against inflationary monetary or fiscal policy by selling bonds, are making a comeback as investors continue to sell amid the prospect of higher interest rates and a growing fiscal deficit. The yield on the benchmark 10-year U.S. Treasury note rose above 5% for the first time since 2007, prompting concerns about the impact on asset prices and the need for careful fiscal policy. The U.S. federal government ended its fiscal year with a deficit of almost $1.7 trillion, adding to a national debt of $33.6 trillion. UBS Asset Management's Kevin Zhao warns that the bond vigilantes' return will have implications for equity and house prices, fiscal policy, and monetary policy.

via CNBC|

#bond-vigilantes #federal-reserve #finance

finance2 years ago•3 min saved

"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.

via Reuters|

#bond-vigilantes #budget-deficit #finance

finance2 years ago•4 min saved

Bond Vigilantes Unleash Chaos in Global Markets

The bond market is causing concern among investors, with JPMorgan warning of a potential "financial accident" if yields continue to rise. Ed Yardeni, president of Yardeni Research, raises the alarm over the "Wild Bunch" or bond vigilantes who have taken control of the Treasury market. Yardeni believes that the vigilantes are concerned about the escalating federal budget deficit and the potential oversupply of bonds, leading to higher yields. He also notes that the vigilantes have left the high-yield corporate debt market stable, suggesting they view government securities as riskier. Yardeni urges policymakers to take action to reduce the federal deficit or risk further bond yield increases.

via MarketWatch|

#bond-market #bond-vigilantes #federal-deficit