Need a short reflection on your understanding.

STREET Continued from the prior page easily beaten the S&P 500 since the election, while de- fensive companies-those better able to ride out a re- cession-have lagged behind and, in the case of utilities, lost money.

The yield curve may be one of the most important measures in finance, but even the question of what the market expects is open to interpretation.

The most obvious draw- back is the starting point. The curve has steepened a lot, but the starting point was deeply depressed. Michael Gapen, chief U.S. economist at Barclays PLC, said the curve isn't steeper because any Trump stimu- lus-assuming it comes-is arriving when the economy is close to full employment. "It might just hasten the end of the cycle because it comes so late in the cycle it doesn't really change the Iong-term outlook," he said. If Mr. Trump's stimulus plans are implemented by Congress-a big if-they might end up boosting infla- tion mor6 than real growth. That is reflected in the rise in the bond market's implied inflation expectations, known as break-even infla- tion. It is back above 2o/o for the next 10 years for the first time since 2014. A proxy for expected real growth, the after-inflation yield on l0-year Treasury in- fl ation-protected securities, rose fast after the election before giving back some of its gains following the Fed- eral Reserve's December rate increase. Yet even at its De- cember peak of 0.747o plus inflation, it wasn't quite back to where it stood a year earlier and was nowhere near the pre-2008 norms. One interpretation: Inves- tors think the downward pressures on growth and in- flation from the aging popu- Iation are greater than any Iikely productivity gains from cutting red tape or im- proving infrastructure. The most Mr. Trurnp can do is make America a little bit greater than it otherwise would be. Some critics argue that the 30-year Treasury is a flawed measure of hopes for growth. It isn't heavily traded, and government de- cisions on issuance, plus price-insensitive demand Iinked to pension obliga- tions, can be as important as beliefs about long-run growth. This may be true, but it's also obvious that if investors truly believed Mr. Trump would deliver a big and permanent boost to growth or inflation, few would want 30-year bonds at a yield ofjust over 3%. Ituowing what the market as a whole is pricing in cre- ates opportunities for inves- tors who have a strong view of what Mr. Trump will achieve. The problem is for those who have little idea what the man in the White House represents; the usual diversifi cation between shares and bonds offers little protection against the risk of a trade war, when both could suffer as inflation rises and profits fall. The Market's View of Trump Bond markets are pricing in faster growth and inflation since the election, with 10-year Treasury yields rising much more than short-dated yields. But the long-run outlook remains depressed, with 30-year yields faiiing to keep up with the lO-year. # l0-year 3O-year minus minus 2-year lO-year yield yield Weekly data 3 percentage points U.S. Treasury yield curve Daily data 1,50 percentage points II t,. 1.25 1, r"" t. s. Nov.8 l, " U.S. election - l 100 i ' n r.l & u./) \ 050 Ii .; I ,J.' .!. t+ tiY Egx,t,lia., ll c6f€CgclooY 0 .a*r*e'i,fj "'t 1," : rLlrf,_-t'\ ra rrrrrt Fully guided tour fiom start to finish-Includes all hotels, all meals. and all activities-Call now for choice dates. Tax. fees extra. Your Costa Rica Tour: Full ltinerary ut Caravan.com Day 1. Begin tour in San Jos6. 5. Free time at your beach resort. 2. Explore active Poiis Volcano. 6, Cruise on the Tarcoles River. 3. Soak in volcanic hot springs. 7. Explore Manuel Antonio Park. 4. Hike the Hanging Bridges. 8. Return with great memories Gosta Rica 8-Days $1195 "Brilliant, Affordable Pricing" sllla"/ -Anhur Frommer, Travel Editor ffi/ Order Free 24-Page Brochure: -%1 Call 1-800-CARAVAN. visit caravan.com 1990 2000 Through lMonday, 12 p.m. ET Sour(e: Thomson Reuters 1'llE \ALL STRUUT.X)LR\.{L.