Bond market’s most feared traders threaten Treasuries once again

Bloomberg/Liz McCormick/3-12-2018

“It’s been a generation since traders like Coats last imposed their will on Washington and Wall Street alike. Yet the original vigilante says he’s seeing signs that the once feared punishers of profligate spending are lurking again, lured back by an expansionary fiscal policy and signs of resurgent inflation — just as the world’s central banks dial back years of unprecedented bond buying that’s largely shielded politicians from market pressures.

‘Some of the stirrings from what we used to know about the old days of inflation are really starting to rear their head,’ Coats, now retired, said from Florida. Back then ‘people paid a lot more attention to the deficits and the cost from the standpoint of what it was to the Treasury. Not so much now, but I think those days are going to be coming back.’”

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