As reported by financial media, a huge French bond selloff is underway that threatens to destabilize banks and worsen the government’s fiscal position. With ten-year bold yields above 5%, the so-called “Bond Vigilantes” have started the selloff. The term “Bond Vigilantes” refers to the collective power of global institutional investors (bond traders, hedge funds, asset managers). They move like a herd, but the signal is always given by a few monolithic global institutions. These entities manage trillions of dollars and act as the trendsetters for the rest of the financial world: primary dealers (BNP, Morgan Chase, Goldman Sachs, etc.), mega asset managers (Black Rock, Pimco etc.), sovereign wealth funds, and central banks.

Such “whales” decide when to start a selloff and make profit from it. They are betting that France’s fiscal position will worsen because of its huge debt and especially its budget deficit, the largest in the EU. With an estimated 5.6% deficit in 2026, the French government would have to cut 72 billion euros from the budget in order to avoid an infringement procedure—impossible in one shot and hardly possible in three years, as Paris has proposed to Brussels. The current social upheaval in France puts even the latter option into the garbage can.