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.