Good News: Yield Jump Should Subside. Bad News: Because of Taxes

The surge in Treasury yields this week caught a lot of investors off-guard, triggering a bout of volatility in the stock market. Joining the “What Goes Up” podcast this week to discuss how government spending packages are affecting interest rates is Amanda Agati, chief investment strategist for PNC Financial Services Group. She also discusses how she looks at alternative high-frequency economic data and why she’s bullish on emerging markets.

Some highlights of the conversation: 

“I think it's pretty clear and well-understood that the $1.9 trillion can get done through budget reconciliation, but not at all clear that we can get the same magnitude of stimulus done for infrastructure without raising taxes. And so I think that's going to be the key to the path forward in terms of the intermediate and longer end of the curve. I think things are going to settle down a bit. We may not actually see rates fall back down meaningfully, but this rate of change has to slow down.”

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