The Fed's Tightening in the Yield Curve Is a Bullish Sign

When the Fed cuts rates sufficiently to re-steep in the yield curve, we want to get back to something normal. The ERP is normally over 400 basis points at the lows; we're less than half that right now. So dial me up, call it 3200 on the S&P, 2.5% on the 10 year note. And I'll do the flip, but you see the thing is that if you're going to turn bullish on stocks, you first have to turned bullish on bonds.

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