The Weekly Fix: London Calling the Shots for a Wild, Wild Ride

Welcome to the Weekly Fix, the newsletter that’s long been edgy about gilts. I’m Bloomberg’s chief rates correspondent, Garfield Reynolds.

The Federal Reserve was rudely shunted aside this week as the center of the bond market world, with the new UK government’s unfunded tax cuts setting off perhaps the wildest action yet in what has already been a year that many investors might wish to forget. The British pound’s Monday swan dive to a record low showed that traders were certain Chancellor Kwasi Kwarteng’s mini-budget would be unsustainable. Rates traders were soon pricing for an emergency interest-rate hike from the Bank of England, and when there wasn’t one that sent UK gilts crashing, which then took German bunds, US Treasuries and the rest of the global sovereign bond markets with them.