Inflation and S&P Multiples
5/19/2021 05:53:00 pm
The critical yield curve inflection point between growth/reflation vs. tightening/inflation based on the last 3 US recessions is about 250 basis points spread between the 10 year and 2 year yields. We are now creeping up on 150 basis points spread today. This is an indication that the economy has room to grow, due to remaining excess capacity caused by the pandemic (see chart in your LinkedIn message box and let me know your thoughts).
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Dan Niles is founder and portfolio manager for the Satori Fund, a tech-focused hedge fund.