Nothing Ado About Much
In anticipation of a large tax reform deal that has powered equity markets higher, the Treasury market has been oddly quiet. Tax cuts for both corporations and individuals have many investors anticipating a pickup in economic growth and inflation. Yet longer-term Treasury yields, largely reflective of growth and inflation expectations, have barely budged in over a month and a half. Most of the action in interest rates has been concentrated in short-term yields, which have steadily marched higher since early September.
The complacency in longer-term yields has been historic. Over the 37 trading days from October 2... Read more