“Inflation is taxation without legislation.”
– Milton Friedman
The Through Line: Investors looking for resolution of the creative tension between cheerful equity markets and fretting fixed income markets were stymied yet again this week. Yields on 10-year U.S. Treasurys remained stubbornly above recent ranges while stocks hit new highs. The disconnect might be less puzzling than it seems at first blush. Investors may be more focused on strong growth pushing prices up (demand shock) versus an old-fashioned wage/price spiral (supply shock).
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