Bond vigilantes

“If the fiscal and monetary authorities won’t regulate the economy, the bond vigilantes will,” says economist Ed Yardeni on Bloomberg. ‘Bond market vigilantes’ is a term he coined in 1984 that can describe any bond-market participant (rather than an elite group of traders or fund managers).

Any bondholder may worry about whether the Federal Reserve has set interest rates too low and allowed the US government to borrow too cheaply to fund spiralling government spending. This may lead to inflation, a particular fear as it erodes a bond’s value. If enough bondholders react by selling bonds then yields will tend to rise as prices fall. This makes debt issuance more expensive for heavily indebted governments.

• See Tim Bennett’s video tutorial: Do we need ratings agencies?

Paul Hodges: house prices could fall 50% in 'Great Unwinding'

Merryn Somerset Webb interviews Paul Hodges about deflation, the global economy's 'Great Unwinding', and how Britain's house prices could halve.


Which investment platform?

When it comes to buying shares and funds, there are several investment platforms and brokers to choose from. They all offer various fee structures to suit individual investing habits.
Find out which one is best for you.


27 January 1969: Students set up the LSE-in-exile

Students at the London School of Economics occupied the University of London Union building on this day in 1969, in protest at the erection of new security gates.