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Fortune
Fortune
Jason Ma

U.S. debt is the 'elephant in the room' amid bond market rout as Fed-fueled interest costs could drive even larger deficits, analysts warn

(Credit: Yuri Gripas/Abaca/Bloomberg via Getty Images)

Recent weeks have seen a major selloff in the bond market as high oil prices spike inflation, but deteriorating U.S. fiscal health is increasingly a dominant factor, according to analysts at Bank of America.

In a note on Friday, BofA announced that the so-called bond vigilantes have returned, referring to traders who protest huge deficits by selling off bonds to push yields higher.

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