Here is the current narrative. The new administration, along with its like-minded counterparts in Congress, will be bringing pro-growth policies such as individual and corporate tax cuts, the slashing of regulations, and deficit ballooning infrastructure spending among many other goodies for the U.S. economy. The anticipated results from this transformational shift in Washington will thus be above trend economic growth and the outbreak of higher inflation. It will be interesting to see if this all indeed plays out over the coming year. But what is becoming increasingly notable is that tales from the yield curve are not necessarily supporting this narrative.
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