Loading ...Ur old enough to remember the term Bond Vigilantes, from the time the Bond mkt ran rates, if the Fed/Government was screwing up the Bond mkt told e’m by driving rates up or down irrespective of what the Fed wanted. Yes the Fed could set rates out to maybe 1 year, certainly 6 months, but go any further and the mkt ruled.
That has changed an awful lot, because A the banks are in lockstep with the Fed, as they get to front run scum trading, making billions and B because via a combination of QE and outright Futures manipulation, the Fed has sent the vigilantes to sleep…..the Fed has also made the Bond mkt main competitor for money, the SM an easy place to park money and make out like a bandit.
But today we see more signs the Bond mkt is waking up, to inflation/debt fears…it’s very early days, but the way rates shot up on the numbers and then the scum came and knocked them back, only for the auction results to drive ’em way back up, way above the initial move….that says the mkt may be waking up….how the scum sort that out, ain’t easy given the size of the financing needs.