"The shouting is coming from "bond vigilantes," a term coined by Wall Street veteran Ed Yardeni in the 1980s, referring to traders who protested huge deficits by selling off bonds to push yields higher."
Treasury expects to borrow more than previously projected in the April-June quarter because incoming cash flow is weaker than anticipated. The estimate rises to $189 billion, which is $79 billion higher than the February outlook, and becomes $122 billion higher after accounting for a larger starting cash balance. The spring quarter usually requires less borrowing because of April tax-filing deadlines, compared with the January-March and July-September quarters. This year, tax breaks enacted in a prior bill and refunds tied to Supreme Court action on global tariffs may reduce cash pressures, with refunds potentially reaching $166 billion. The borrowing update reflects a large supply of new Treasury debt. Despite a 175-basis-point Fed rate cut since mid-2024, the 10-year yield has fallen only about 35 basis points, which is described as an unusual disconnect. Bond vigilantes are cited as traders who push yields higher to protest deficits.
Read at Fortune
Unable to calculate read time
Collection
[
|
...
]