Bond Vigilantes

Is A US Government Debt Crisis Imminent?

May 21, 2025 3 min read paid

Stock investors have been less "tarrified" about President Donald Trump's tariffs since April 9, when he postponed most of his proposed reciprocal tariffs by 90 days (chart). However, they may now be getting spooked that the bond market might be on the verge of a debt crisis, especially after Moody's downgraded US government debt on Friday and Japanese bond yields soared in recent days.

Ed Yardeni

Bond Vigilantes Hit Another Homerun

Apr 9, 2025 3 min read paid

"Bond investors are the economy's bond vigilantes. ... So if the fiscal and monetary authorities won’t regulate the economy, the bond investors will. The economy will be run by vigilantes in the credit markets.” – Ed Yardeni, 1983 "I used to think that if there was reincarnation, I wanted to come back as the President or the Pope or as a .400 baseball hitter. But now I

Ed Yardeni

Stock Market Vigilantes On The Warpath

Mar 10, 2025 3 min read paid

The Stock Market Vigilantes have spoken. They don't like tariffs, and they don't like mass firings of federal workers. That's because they don't like stagflation, and they fear that Trump 2.0's focus on these measures could cause a recession with higher inflation. They really didn't like President Donald Trump's message on Sunday during an interview

Ed Yardeni
Eric Wallerstein

A Bond Vigilante In Trump's Court

Feb 6, 2025 3 min read paid

Trump 2.0 is borrowing a page from the Clinton administration's playbook, specifically the one in which Robert Rubin and James Carville warned Clinton that he had to respect the power of the Bond Vigilantes and maintain fiscal discipline. US Treasury Secretary Scott Bessent yesterday said that he and President Trump are less concerned with the federal funds rate (FFR) and instead are hoping to contain the 10-year

Ed Yardeni
Eric Wallerstein

Bond Vigilantes Put 5% Yield In Crosshairs

Jan 7, 2025 3 min read paid

The US economy continues to roar. December's ISM purchasing managers survey showed that services activity remains strong. The JOLTS data, albeit a bit stale from November, showed job openings jumped. That aligned with the recent rise in measures of business and consumer confidence. So why did stocks turn lower today? The answer lies with the bond market. The prices-paid index in the ISM nonmanufacturing PMI jumped from 58.

Ed Yardeni
Eric Wallerstein

MARKET CALL: Crosscurrents & Riptides

Dec 29, 2024 3 min read paid

January could start the year off with some volatility in the bond and stock markets. There are lots of fundamental and technical crosscurrents and a few possible riptides. The Q4 earnings reporting season during January should show a solid increase in S&P 500 operating earnings per share of at least 8.5% y/y (chart). We expect closer to a 10.0% increase since positive earnings surprises regularly

Ed Yardeni
Eric Wallerstein

Bond Vigilantes Pushing Back Against Reckless Monetary & Fiscal Policies

Dec 28, 2024 3 min read paid

The 10-year Treasury bond yield is up 100bps since the Fed started lowering the federal funds rate (FFR) by 100bps on September 18 (chart). Even the 2-year Treasury yield is up about 75bps. We warned about this happening back in August. The Bond Vigilantes are sending a loud warning message. They aren't convinced Donald Trump, the new sheriff coming to town, will maintain fiscal law and order any

Ed Yardeni
Eric Wallerstein

Bond Vigilantes Butting Heads With Washington's Profligate Crowd

Dec 19, 2024 3 min read paid

Ed Yardeni
Eric Wallerstein

The Bond Vigilantes Are Fighting The Fed

Dec 12, 2024 3 min read paid

After today's PPI, we won't be surprised if Fed officials plant a story in The Wall Street Journal over the weekend titled something like "Fed Officials Might Vote To Pause Rate Cutting Following Hot Inflation Data." The current consensus seems to be that the Fed will cut the federal funds rate (FFR) by 25bps on December 18. But it might be a "hawkish

Ed Yardeni
Eric Wallerstein

Bond Vigilantes Started Voting Early

Oct 23, 2024 3 min read

The US presidential and congressional elections aren't until November 5, but the Bond Vigilantes are voting early. The 10-year US Treasury bond yield has risen a whopping 63 basis points to 4.25% since the Fed's September 17-18 meeting (chart). In exit polls, the Bond Vigilantes are saying they are voting against Fed Chair Jerome Powell's dovish monetary policy because the economy is running

Ed Yardeni
Eric Wallerstein

Trick Or Treat For U.S. Treasury Market?

Oct 21, 2022 2 min read paid

Halloween has come early to the US Treasury securities market. Fed officials have been scrambling in recent days to scare investors almost every day in speeches declaring that they will continue to raise the federal funds rate (FFR) until inflation breaks. They are going trick-or-treating now because they won't be able to do so during Halloween which falls in their "blackout period" starting Saturday and ending

Ed Yardeni

The Bond Vigilantes: They're Baaaack!

Sep 26, 2022 1 min read

The Bond Vigilantes are back. They were last active during the 1980s and early 1990s. They've been mostly lying low since then. That's partly because inflation remained remarkably subdued from the mid-1990s through 2020. Furthermore, in response to the Great Financial Crisis and then the Great Virus Crisis, central banks kept the Bond Vigilantes in check with ZIRP, NIRP, and QE. [1] No more: They'

Ed Yardeni

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