Bond vigilantes can also protest the actions of a central bank, like they did in the 1980s. In protest, bond vigilantes dump bonds, which causes yields to rise. They believe that the US government is supplying too much public debt, through the issuance of bonds, than investors are willingly able to absorb in an environment of elevated inflation and high interest rates. They’re known as “bond vigilantes,” fixed-income traders who threaten or actually sell bonds in protest of an issuing entity’s policies or financial situation, and in this case, it seems to be the US deficit. The national debt currently stands at more than $33 trillion, according to the Treasury Department, and there aren’t any signs that debt could meaningfully shrink anytime soon.Īnd as the mountain of debt keeps piling up, and the government’s budget deficit remains massive, some bond traders are now joining politicians in decrying the government’s ever-growing financial obligation. It’s no secret that the US government has amassed trillions in debt over the past few decades.
0 Comments
Leave a Reply. |
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |