The Markets Don’t Believe in Trump for the Long Term
The yield curve tells a story of Trumpflation, a boost to both growth and inflation lasting a few years, with little long-term impact on the real economy
.. The yield curve in the all-important Treasury market tells a story of Trumpflation, a boost to both growth and inflation lasting a few years, with little long-term impact on the real economy...“People have pushed up their expectations about growth, but it’s more of a cyclical view than a structural view,” said Jan Hatzius, chief economist at Goldman Sachs... The hope of a cyclical boom is reflected across equity markets, although the details of the new administration’s policies create more noise at a stock level.
.. If Mr. Trump’s stimulus plans are implemented by Congress—a big if—they might end up boosting inflation more than real growth... One interpretation: Investors think the downward pressures on growth and inflation from the aging population are greater than any likely productivity gains from cutting red tape or improving infrastructure... but it’s also obvious that if investors truly believed Mr. Trump would deliver a big and permanent boost to growth or inflation, few would want 30-year bonds at a yield of just over 3%.