Bond-market’s red alert has been triggered

Today, for the first time since the 2008 financial crisis, the bond-market warning light suddenly flashed red.

Bloomberg reports, the bond-market has been a stable green for years-until today. The last time the red alert was triggered, it was followed by the biggest bond sell-off since the financial crisis.

Why does the bond-market alert matter to us outside the financial world?

Well, let’s not forget the financial crisis of 2008 hit the average person the hardest and none of us saw it coming.

While this light is not signalling the start of another financial crisis, it is important to pay attention to warning signs and economic disruptions.

After all, the bond-market is of particular interest as shoddy mortgage bonds were the root cause of the financial crash.

Bond-market fluctuations pose a serious risk to the health of the London Stock Exchange and Canary Wharf banks. Which, in turn, is a risk to us Londoners.

 

Words: Monica Young

Photo: Pixabay