Bond markets are signaling growing investor unease about government fiscal policies, with the UK emerging as a focal point of concern. The situation began with a US-led global bond selloff as markets scaled back Fed rate cut expectations, but has evolved into a particular challenge for the UK, where 30-year gilt yields have hit levels not seen since 1998. The market turbulence threatens to eliminate the UK government’s £9.9 billion fiscal buffer and has forced Chancellor Rachel Reeves to consider spending cuts over tax increases. This development comes as outgoing US Treasury Secretary Janet Yellen warns about the risks of “bond vigilantes” – investors who demand higher yields due to perceived fiscal irresponsibility. The situation has drawn comparisons to the UK’s 1970s financial crisis, highlighting the delicate balance governments face between fiscal management and market confidence.