Bond Crimes
Why The Bond Vigilantes Are Not Coming For The UK & A Misfiring TACO Trigger
Recent weeks have seen a surge in interest in the markets’ biggest bogeyman, the mythical bond market vigilantes. No one has ever met a bond vigilante, and it isn’t clear what sort of investor they are, but we are assured they exist and are ready to punish governments for overly lax fiscal policy:
The bond vigilantes have clearly taken some sort of sabbatical from their typical activities of protecting the public from crime. Their recent activity has seen a surge of interest on google in their identities and what they stand for:
While there is little doubt that bond market vigilantes (whoever they are) are concerned about the trajectory of global public sector debt, we think that some of the narratives being pushed are pretty wide of the mark. This is not to blame the bond vigilantes of course (sometimes societal failings make vigilantism necessary), but their mythology has been used to justify some pretty shabby analysis.
In this respect, it’s time to tear down two common criticisms that have been doing the rounds in the UK, and check in on whether bond market vigilantism will have an impact on the US conflict with Iran.