Trump may face bond vigilantes amid concerns over inflation and the deficit
Michael M. Santiago/Getty Images Rising yields reflect concerns over inflationary policies and potential economic impacts. Bond vigilantes may pressure Washington to address deficits, affecting fiscal policy decisions. Jimmy Chang says buying right at the 5% tipping point isn't a good idea. Wall Street doesn't constantly look to Washington for investment advice or direction, but the bond market is one place where they definitely intercept. As investors increasingly accepted the probability of a Trump victory, the 10-year Treasury entered choppy territory the month heading into elections. The rising yield signaled concerns over inflationary policies under a Republican stronghold. Markets were discounting an environment in which deregulation and corporate tax cuts could lead to higher investment activity and bigger shareholder returns, stricter immigration laws could cause labor supply shortages, and tariffs and counter-tariffs could pushed up the prices of goods
