Inflation At 7%, The 10-Year Treasuries Under 2%, Something’s Got To Give

  • Huge negative interest rates are not here to stay, inflation is going to come down and yields will rise a bit further.
  • While the next 12 months or so, it might look like 1970s style stagflation is making a return, this isn’t going to last.
  • For inflation to become ingrained in the economy, we need a structural shift in the power balance between labor and capital, and we can’t see that happening.
  • A host of indicators already point to a softer economy, the present labor scarcity is a transitory phenomenon.
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