Capital Economics: Volatility in the US and UK bond markets reveals that people and policies are equally critical for investors.

Kapital Macro analyst Neil Shearing pointed out in a report that recent volatility in the US and UK sovereign bond markets indicates that personal factors and fiscal policies are crucial for investors. Shearing said that the UK bond market faces risks because UK Chancellor Rishi Sunak may be replaced by someone less committed to fiscal rules. In the US, fiscal stability may depend on whether Treasury Secretary Janet Yellen can continue to influence President Donald Trump and gain his favor. In recent months, due to investor concerns about fiscal sustainability, both US treasuries and UK bonds have experienced significant selloffs. These situations demonstrate that personal factors are equally important, and sometimes even more important, than policy factors.