5/21/2025
Consistent with our view that the recent rise in yields has everything to do with the proposed federal spending package, the 10yr treasury yield just popped to above 4.5%, and the 30-year to 5.01% on news that an agreement was reached to raise the state and local tax deduction to 40%.
Again, fiscal stimulus, and expanding the budget deficit, at this juncture, virtually has to be viewed as inflationary... Like I keep saying, while clearly they sense urgency as economic weakness brews under the surface, pumping the gas before the hard data roll over will likely prove to be yet more problematic for the bond market, and ultimately equities (at these valuations).