So-called bond vigilantes - investors who punish profligate governments by selling their bonds, driving yields higher - were a feature of markets in the 1990s, when concerns over U.S. federal spending pushed Treasury yields to 8%.
Strategist Ed Yardeni, who coined the bond vigilantes term in the early 1980s, has also chimed in.
“The bond vigilantes have been challenging (Treasury Secretary Janet) Yellen’s policies by raising bond yields to levels that threaten to create a debt crisis,” he said in a Financial Times opinion piece on Wednesday.
Famed bond investor Bill Gross, who co-founded Pacific Investment Management Co., said bond vigilantes will have a muted effect now given the Fed's larger role in markets.
Bond investors "are rather powerless pawns in this interest rate chess game," he told Reuters by email.
Persons:
Fitch, doesn't, Gene Tannuzzo, Jake Remley, Ed Yardeni, Janet, ”, Bill Gross, Greg Whiteley, Robert Tipp, David Randall, Davide Barbuscia, Ira Iosebashvili, Megan Davies, Cynthia Osterman
Organizations:
Bond, Columbia, Treasury, Apollo, Treasury Department, Government, Social, Research, Management, “, Pacific Investment Management Co, Thomson
Locations:
Wall, Boston