Income investors will be forgiven for mistaking the dynamic in Treasury yields over the last two years for another episode of The Fast and The Furious franchise. 10-year yields have risen over 1.5% as the economy has shifted into high gear, fiscal spigots have been turned on and policy-making has become more unpredictable. Adding to investor anxiety is the persistent theme of yield curve flattening which has a fantastic track record in forecasting recessions.
In this article we take a big picture view and try to look through the market noise and gauge whether Fixed-Income