- The US economy would need to grow by 5.2% (after inflation) this year in order to re-attain its 2.1% trend growth by the end of this year.
- Near term, though, growth should be pleasantly robust, as the economy emerges from its Covid travails and a return of confidence boosts consumer confidence and business investment.
- With 5-yr real yields now abysmally low (-1.8%), we can infer that the market sees very little growth potential for the US economy in the years ahead.
- Inflation expectations embedded in TIPS and Treasury prices are now approaching 2.33%.
For further details see:
Keep On Borrowing And Buying