FT News Briefing Bond vigilantes target government spending
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Jan 10, 2025 As the EU braces for potential policy shifts under a new US administration, bond markets are witnessing a resurgence of vigilance toward government spending. Insurers anticipate staggering losses from wildfires in Los Angeles, estimated at $20 billion. Meanwhile, Elon Musk is speculated to be mulling over strategies to unseat UK's Prime Minister Sir Keir Starmer ahead of the next election. Additionally, the UK government moves to cap resale ticket prices amid a crackdown on touts.
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Bond Market Sell-Off
- Bond markets in major economies like the US, UK, and France are experiencing sell-offs, driving up borrowing costs.
- Investors are concerned about high government debt levels and increased spending plans.
Return of Bond Vigilantes
- So-called "bond vigilantes" are back, pushing borrowing costs higher to pressure governments to tighten finances.
- These investors are worried about high debt levels and increased government spending in major economies.
Wildfire Insurance Losses
- Wildfires in Los Angeles could cause up to $20 billion in insurance losses, impacting wealthy areas with high property values.
- This could make home insurance even more unaffordable for Californians.