Perhaps, but isn't it also true that the US government itself now constitutes a very large part of the bond market? Rarely do I ever hear the term bond vigilantes any more, maybe because there no longer is such a thing, except perhaps under extreme circumstances.
I'm not 100% sure how to answer the first question. Yes, in a way, but those aren't tradable instruments any more - they're part of the Fed balance sheet. And technically, the Fed isn't government.
Yeah, I know....
This is the point - no more bond vigilantes as in days of yore. Bonds are smooth sailing on calm seas. This signals that everybody's on board with the low rates.
So this signals a lack of concern without deficits/debt.
