Need a short reflection on your understanding.

;1$'Y: trt H:,fl i'tl {tf . tt '; James Mackintosh Markets Ultimately Lack Belief ln Trump Investing is about two things: decid- ing what is likely to hap- pen and com- paring it to what's Priced in to markets. The discussion about what's likelY to haP- pen under President Donald Trump has dominated media since his election, and everY investor has a view. What's important, then, is to com- pare it to what's Priced in. One chart cuts through all the chatter. The Yield curve in the TreasurY market tells a story of TrumPflation, a boost to both growth and in- flation lasting a few Years, with little long-term imPact on the real economY. "People have Pushed uP their exPectations about growth, but it's more of a cY- clicai view than a structural view," said Jan Hatzius, chief economist at Goldman Sachs Group Inc. The yield curve compares bond yields at different dates and has steePened sharply as l0-Year TreasurY vields rose much more than ihore on two-year bonds since the election. This haP- pens when investors exp€et iaster growth and higher in- flation, and has a Positive feedback looP to investment, as investments further in the future carry a higher ex- pected reward. Longer-dated bonds tell a different storY, though, with the curve flatter the further in the future it goes' The 10- year yield has risen much more than 30-Year Yields' which suggests little change in long-run exPectations for productivitY or inflation. The hoPe of a cYclical boom is reflected across stock markets, although the details of the new adminis- tration's Policies create more noise at a stock level. CYcli- cal companies such as car makers and airlines have Please see STREET Page 82 I Microsoft launches $17 billion bond sa1e............'.."...'...."".".". 811 rberg Nt Ll t inve since , iors si Lls hat 00 P( ired lc point :ir big droP s !79Pa rr its I 28, u te Po e Dec ;,orc Br Ar tht agr da:

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