Donald Trump’s victory in the presidential election has sent shockwaves through the bond market, with investors known as ‘bond vigilantes’ expressing concerns about rising inflation under his economic policies. This article delves into the role of bond vigilantes, examines Trump’s potential inflationary agenda, and analyzes the market’s reaction to his win.
Long-term U.S. Treasury yields have surged, crossing the 4.50% mark for the first time since July, fueled by worries over fiscal sustainability and resurgent inflation. The move has sparked a sell-off in stocks, with the S&P 500 poised to end its winning streak. Experts warn of potential dollar depreciation and ballooning federal budget deficits, raising concerns about the future of U.S. economic dominance.
