Below is a chart and brief excerpt from today's Early Look written by Hedgeye CEO Keith McCullough.
What’s most exciting about the American #Quad2 data isn’t where it is today (our US GDP Nowcast ticked higher, again, post yesterday’s ADP jobs report and the MBA Purchase Applications ramp to -1.71% y/y)…
It’s where it’s going in the next 3-6 months. While our headline “inflation” nowcast ticked higher to 1.23% y/y for Q4, that rainbow and puppy dog could easily DOUBLE towards +2.4% by Q2 of 2021.
What do you think bond yields are going to do if we’re right on that? You know where we could be wrong? A: to the upside! Yes. With Janet and Cece hitting the CTRL+Print JOBS buttons in t-minus 3 months, bond yields could rip higher.
If they rip higher from here, Real Rates will ramp (off their Deflation Cycle lows) too. The US Dollar Crashing into an epic US GDP Ramp from -1.7% (today) to +10.9% y/y growth rate in Q2 of 2021 will make you feel like that baby kangaroo!