Remember when the term premium was a hot topic?

Let me stop myself. The term premium’s never a hot topic in any conventional sense of the phrase “hot topic.” The vast, vast majority of humanity doesn’t know what the term premium is and God willing they’ll never be compelled to learn about it. Because it’s mind-numbingly obscure.

With that out of the way, the term premium was topical, and eminently so, late last year among the relative handful of tortured souls compelled to care about such things, a group which unfortunately includes me.

Beginning in late July, the term premium began a rapid ascent out of negative territory, where it shouldn’t have been in the first place. In theory, investors should always demand compensation for taking on the risk associated with locking their money up for prolonged periods of time versus simply rolling shorter-maturity debt of comparable credit quality. But for a laundry list of reasons, the term premium was negative in the US.

Market participants debated the cause of the rapid re-repricing. One popular narrative said investors finally woke up to the allegedly deplorable (there’s a political joke there) state of America’s fiscal position, and also to the reality that gridlock inside the Beltway meant the odds of a bipartisan push to address the situation were (and remain) vanishingly small. The Fitch downgrade was predicated on that very narrative.

At the same time, Treasury lifted coupon supply, underlining a dynamic which, to many observers, was cause for concern: The buyer base for US bonds was shifting away from price-agnostic buyers like the Fed and banks and towards price-sensitive investors, which is to say the market for Treasurys was becoming a real market again. Just when supply was increasing materially.

It all turned around in early November, when Janet Yellen cut the US borrowing estimate and tipped smaller-than-expected coupon increases, a de facto acknowledgement of the term premium re-pricing and an effort to cap it. That effort was successful. The term premium went negative again and it’s been negative since, as illustrated above.

But here’s the thing: The narratives which allegedly drove the term premium re-pricing (shown in red in the figure) are still just as valid today as they were in August and September, assuming you bought them (or sold them, in this case) in the first place. Coupon increases may be behind us, but there’s been no comprehensive effort to address America’s allegedly “unsustainable” fiscal trajectory and there’s been no thaw in the partisan permafrost.

And what about inflation? It’s not back to target yet. Price stability hasn’t been entirely restored. And yet the Fed still intends to cut rates this year. Some believe that juxtaposition’s indicative of a plan to inflate away America’s debt “problem.” Surely that’s bearish for the US long-end?

JPMorgan’s Mislav Matejka made the case this week. “JPM Fixed Income’s call is that bond yields are fundamentally set to move lower in 2H, but we note a pickup in inflation swaps,” he wrote. When taken with “the outright negative term premia for bonds again,” it looks like there’s “a lot of complacency in the bond market with respect to inflation risk,” Matejka added.

So, what’s going on? Why hasn’t the term premium moved higher again? It’s supposed to represent the compensation demanded in exchange for the uncertainty that goes along with longer investment horizons. I can’t speak for anyone else, but I’m not feeling very certain about the future. Sure, rates’ll probably be lower in a few years, but then again who knows. This is a new macro regime. R-star’s almost surely higher. Given inflation risk, fiscal profligacy, political tensions and so on, shouldn’t the term premium at least be a little bit positive?

Maybe. Or maybe the market suspects the factors which weighted on term premia for years are set to reassert themselves. Or maybe the market suspects the Fed’ll be compelled to cap yields. Or maybe the whole discussion’s about as useful as the term premium is discernible.

As an Axios reporter amusingly put it five months ago, this is “effectively [a] mathematical fiction aimed at quantifying unobservable numbers — so [it] should be treated with a certain amount of caution.”

Maybe dry humor’s not dead after all.