Where Are the Bond-Market Vigilantes?
It was a rare moment of silence at a conference known for its long and informative panels.
At a morning Milken Institute Global Conference panel on the overview for the United States economy, Milken Institute chief research officer Ross DeVol asked panelists whether “bond-market vigilantes” would force up U.S. interest rates in reaction to the federal government’s budget deficit.
“My own view is that maybe the markets give them to late spring. Or early summer next year. If something is not done on a bipartisan basis, maybe bond yields go up,” he said.
All eyes immediately turned to the chair furthest from the moderator, where San Francisco Federal Reserve President John Williams was sitting.
Williams must be a very good poker player, because he hardly batted an eyelash.