Monday 3/29 Dagnino article on Bond Markets

On Monday Dagnino wrote an article on the Bond Market.  He is right.  His takeaways in his own words:
  • The markets have been tightening by raising the cost of long-term money. The Fed cannot do anything about it. They cannot lower interest rates because they are at zero percent.
  • More debt (stimulus) cannot overcome the tightening caused by rising bond yields.
  • The business cycle is much closer to the end of Phase 2 (strong growth phase) than the beginning of Phase 1 (beginning of the expansion phase). 
The most important point is that third bullet:  when we hit end of Phase 2 the economy will overheat and begin to top off.  The market generally leads the economy by 6 months.  So it is important to keep careful watch on things.  Individual stocks and individual sectors will lead and roll over earlier than others.  In the meantime inflation should continue to climb.

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