McCain and Obama Focus on the Economy

The weak economy is a central focus of the presidential campaign.

Bernanke recognizes Americans are feeling a pinch.

Bernanke recognizes Americans are feeling a pinch.

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Those deficits could be a big problem if bond traders think extravagant government spending will lead to even higher inflation—poison for bondholders. In that case, the so-called bond market vigilantes of Wall Street "will send Washington a nasty message," says analyst Gregory Valliere of the Stanford Group, by jacking up interest rates. Spiking interest rates along with spiking gas prices and spiking unemployment? This economy might be ripe for a teardown after all.