As of this morning (1/9/25) spreads of US Treasuries, A rated industrial bonds, BBB industrial bonds and BBB financial bonds are up almost 25bp from the day after the election. The Fed has little to do with longer rates, other than jawboning. From my seat in an investment organization I see a healthy economy with some warning signs being shown. Markets think inflation could grow because Americans are spending more than they are making (demand) and TrumpTalk is that there could be further constraints on imported goods because of tariffs (supply), so prices could rise. If in a month or so King Dotard II declares he was just jivin' about tariffs, rates will stay the same and consumption will cool. If widespread tariffs go into effect, once US suppliers have to reach across borders for tariff-laden goods, prices to the consumer are guaranteed to rise. Two things will then happen--demand will fall marginally, and prices will rise. Inflation will grow from its current modest level. This could cause a spiral and the US could be in a recession within the coming 12 months.

Of course, the fat orange criminal insurrectionist and golf cheat will blame his predecessor, the guy under whose watch the S&P 500 grew more than during the reign of Dotard I...