Ed Yardeni: Bond vigilantes are saddling up over US fiscal risks

• The US Treasury Secretary's mission to quell bond yields is a 'tough call' and has been largely ineffective given current rising yields.
• 'Bond vigilantes' are stirring due to concerns over the US's $40 trillion national debt and $1.5-$2 trillion annual deficits, even when the economy doesn't need it.
• Persistent inflation and 'higher for longer' oil prices are expected to fuel further bond market unease and second/third-order effects on core inflation.
• Yardeni suggests the Treasury might need to significantly increase bond buybacks, a 'bazooka' in its toolkit, to keep 10-year yields below 5%, though this would be a riskier move.

Ed Yardeni expresses concern over rising US Treasury yields, attributing it to 'bond vigilantes' reacting to unsustainable fiscal policy. He highlights the massive national debt and large deficits, even outside of recession, as key drivers for persistent inflation and higher bond yields, suggesting the Treasury might need to resort to significant bond buybacks.