The rationale for the recent runup in Treasury yields is that that the economy will strengthen under El Presidente Cabeza Grande Trump. Supposedly El Presidente’s wise and stimulative policies will make the economy grow 5%. Hey, if El Presidente Cabeza Grande says it, it must be true! And the Wall Street pundits, with their infinitely perspicacious analytical capability have wisely concluded that this means that inflation will rise.
Never mind that we’ve already had massive asset inflation. That doesn’t count in their worldview.
So we’re going to have more “inflation.” And bond yields will magically rise, just because that’s what they always do when there’s more inflation.
I have a simpler explanation. It’s called supply and demand.
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