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Make Or Break Something
Earlier this week, Wall Street's most prominent bear suggested the recent spike in bond volatility and an increase in the general level of uncertainty around the Fed's rate path were the "most significant developments" in the macro universe.
Evidence of US economic resilience and labor market strength combined with hawkish Fed speak drove short-end US yields to new cycle highs last week, while 10s reclaimed a four-handle and pricing for the July FOMC meeting continued to suggest a hike is all b
We have disinflation. Stock market sentiment loves this. If the next shoe drops, which seems likely once stimmy money runs out, sentiment can turn in a hurry.
One way or another, Congress will continue to spend significantly in excess of collected revenues- “stimmy” will continue to exist, in alternative formats. Pretty soon, excess spending (over collected FICA receipts), will go to retirees.