TLT - Stagflationists Beware: The United States Will Likely Get The Opposite

• The Federal Reserve bond buying/QE taper will have a more significant downward effect on US inflation than US growth due to global and emerging market spill-back effects.
• The US economy is on very firm footing and growth/employment has made substantial progress surpassing expectations and forecasts.
• While US inflation, particularly core, has outpaced and will remain higher than developed market peer economies, it will level as commodity and input prices come down on global growth concerns.
• Inflation and commodity prices including oil are driven by global demand, not only what is going on in the US.
• US yields look poised to rise on Fed taper, strong US data (which yields have largely ignored) and major US government issuance. Higher yields will dent inflation much more than resilient US growth.

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