BILS - Remember The Deal

• While a steepening yield curve sows the seeds of its own destruction via an ever more attractive roll and carry, especially with forward guidance on the front end, there is always a risk that markets end up questing the commitment to low policy rates.
• When Mr. Powell says that the Fed is “not even thinking about thinking about raising rates”, this is exactly what markets are now contemplating that the FOMC is, in fact, thinking about.
• Higher long-term interest rates, coupled with looming inflation pressures in global energy and commodities, raise some tricky questions for equities. So far, an underlying rotation - which in itself is tied to rising yields - means that the S&P 500 is advancing to new highs, even as the Nasdaq is off 4% from its highs.

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