✔️Crypto breaks $3 trillion as bond vigilantes tame tariff fears.
✔️The ongoing crypto price recovery can be attributed to a group of investors known as the bond vigilantes, a term coined by economist Ed Yardeni.
✔️These vigilantes are investors who often keep the government in check by selling bonds when there is a significant policy change. By selling their bond holdings, these investors typically push yields high and make it expensive for the government to borrow.
✔️The rally mirrored the stock market’s performance. US stock indices, such as the Dow Jones and the Nasdaq 100, have all jumped by over 10% from their monthly lows. International indices like the German DAX and French CAC 40 have also jumped.
✔️Earlier this month, President Donald Trump delivered his Liberation Day speech. The highest levies were applied to China, but a baseline 10% tariff was applied across the board with additional reciprocal tariffs that vary by nation.
✔️But Trump blinked after so-called “bond vigilantes” sprung into action. Investors essentially sold off bonds to pressure the government to reverse course.
✔️“The Bond Vigilantes have struck again,” wrote Yardeni. “As far as we can tell, at least with respect to U.S. financial markets, they are the only 1.000 hitters in history.”
