The bond vigilantes are back.
But this time they are roaming mostly through Europe rather than the United States — at least for now. Their mission: to force governments to cut budget deficits that have ballooned in the wake of the financial crisis.
As big investors in the credit markets, activist bond traders developed a fearsome reputation in the early 1990s by pushing up yields on Treasuries in order to force the government to tame large deficits. Their most famous target was a newly elected president, Bill Clinton, whom they pressured to abandon campaign promises of tax cuts.
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