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Commentary
I spent most of last week at the Las Vegas Money Show, where I caught up with our favorite economist, Ed Yardeni, who pointed out in his Wednesday morning briefing that the “bond vigilantes” (a term Ed created in the 1980s) are skeptical of new British Prime Minister Andrew Burnham’s plans. (The role of bond vigilantes, Ed has said, is to protest inflationary policies by selling bonds, pushing yields higher.)
Burnham is Britain’s seventh Prime Minister since the Brexit vote a decade ago (in June 2016), including five in the last four years. I wish Prime Minister Burnham well, but the reason Britain gets a new Prime Minister almost every year is due to the bond vigilantes squelching their government spending proposals. In fact, Burnham told ITV Britain was deep “in hock” after politicians lost control of public finances in various key sectors – like energy, water, and housing. Since Britain has the highest borrowing costs in the G7 and has lost many affluent households, the bond vigilantes are ready to pounce on any misstep Burnham makes….
I spent most of last week at the Las Vegas Money Show, where I caught up with our favorite economist, Ed Yardeni, who pointed out in his Wednesday morning briefing that the “bond vigilantes” (a term Ed created in the 1980s) are skeptical of new British Prime Minister Andrew Burnham’s plans. (The role of bond vigilantes, Ed has said, is to protest inflationary policies by selling bonds, pushing yields higher.)
Burnham is Britain’s seventh Prime Minister since the Brexit vote a decade ago (in June 2016), including five in the last four years. I wish Prime Minister Burnham well, but the reason Britain gets a new Prime Minister almost every year is due to the bond vigilantes squelching their government spending proposals. In fact, Burnham told ITV Britain was deep “in hock” after politicians lost control of public finances in various key sectors – like energy, water, and housing. Since Britain has the highest borrowing costs in the G7 and has lost many affluent households, the bond vigilantes are ready to pounce on any misstep Burnham makes….
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