Meanwhile in markets, S&P 500 futures are off yesterday’s all-time high after FOMC minutes showed a relatively downbeat view of the economy amongst Powell & Co. Or at least, that’s the spin the wires have put on the not so very epic decline in equities this morning. Naturally, we continue to take our cue from bonds, with US Treasury yields continuing to trade range-bound at the long end. While it’s clear that in many jurisdictions the pandemic induced decline in GDP is less than feared, the bond market realizes that the fiscal pump priming has resulted in soaring debt levels, and that will require many, many years of low nominal (or in case of the Eurozone, negative) rates and negative real rates.

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