When hedge fund billionaire Ken Griffin told an industry conference this week that the US bond market was due some discipline, he was voicing the concerns of many investors about the impact of the government’s huge spending and debt issuance plans.
US government spending “is out of control”, he told the Futures Industry Association’s gathering in Florida. “And unfortunately, when the sovereign market starts to put the hammer down in terms of discipline, that can be pretty brutal.”
But while there may be good reasons for so-called bond vigilantes — hedge funds and other traders that punish free-spending nations by betting against their debt or simply refusing to buy it — to turn their attention to the Treasury market, analysts say they have so far failed to materialise.