What is behind China’s perplexing bond-market intervention?
The central bank seems to think the government’s debt is too popular
![The People's Bank of China building in Beijing, China](https://www.economist.com/cdn-cgi/image/width=1424,quality=80,format=auto/content-assets/images/20240817_FNP501.jpg)
Many governments live in fear of bond-market “vigilantes”, investors who punish errant policies by aggressively selling the sovereign’s debt, driving down its price and thereby pushing up its yield. Financial regulators also worry about bond-market malfunctions, such as unsettled trades, when one party to a transaction fails to honour its promises. These mishaps can send ripples of anxiety through an entire financial system.
This article appeared in the Finance & economics section of the print edition under the headline “The vigilante next door”
Finance & economics August 17th 2024
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