Andy Constan says rising bond yields are just markets finally catching up to a growth boom driven by AI and the OBBB
You have to look at what’s happened in the bond market. And I put it in context of, man, thanks for finally showing up at the party. We’ve had a meaningful growth impulse for multiple years now, driven by AI capital and capex, which had been going on since 2023, when ChatGPT first was released. It really accelerated last summer, not this summer, the summer before last, with the OBBB, where capex was tax-advantaged by the budget. And so we saw that massive acceleration in growth. The consumer has remained strong, because asset markets have remained robust. And so that combination of things has created an above-trend growth impulse, inflation above target, and, yeah, I mean, catch up bond market. And finally, it did. I don’t know why, perhaps it’s Warsh leaning hawkish and then ultimately hiking. But really, as far as I can tell, the only thing that really has happened in the bond market is that the long end globally has caught up to the idea that we’re in the midst of a growth boom.
#Bonds #Macro
You have to look at what’s happened in the bond market. And I put it in context of, man, thanks for finally showing up at the party. We’ve had a meaningful growth impulse for multiple years now, driven by AI capital and capex, which had been going on since 2023, when ChatGPT first was released. It really accelerated last summer, not this summer, the summer before last, with the OBBB, where capex was tax-advantaged by the budget. And so we saw that massive acceleration in growth. The consumer has remained strong, because asset markets have remained robust. And so that combination of things has created an above-trend growth impulse, inflation above target, and, yeah, I mean, catch up bond market. And finally, it did. I don’t know why, perhaps it’s Warsh leaning hawkish and then ultimately hiking. But really, as far as I can tell, the only thing that really has happened in the bond market is that the long end globally has caught up to the idea that we’re in the midst of a growth boom.
#Bonds #Macro
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