The Fed and Congress have geared up for another run at stimulus. The bond market wants to make sure constraints, mainly energy, are in good supply as Congress generates more goods, hence lenders demand higher yields. The economy is making sure supplies are available to Congress by lowering velocity.
Congress will successfully deliver more goods for a while. Economists will see that consumer transaction sizes are larger, but economists will miss that transaction rates are lower, and total output drops. Quants will get this and make money, because quants get that we are a bounded calculus.
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