Has the U.S. economy just entered a twelve-week window of explosive growth?: The MUFG Global Markets Podcast

Chair Powell’s tenure at the FOMC may wind down over the coming ten-months, but while he is still Chair, Mr. Powell has placed the onus upon macroeconomic data outcomes to be strong enough to cause him to budge from his extremely dovish policy stance, both over quantitative easing's asset purchases and over the policy rate anchored at the zero-lower-bound.

In this episode, U.S. Rates Strategist John Herrmann peers into the machinations of the March employment report and his models find numerous indications of a rapid acceleration in employment growth, not just for the month of March, but also for the months of April through October 2021. The household survey—has a mirror image to employment dynamics—may exhibit a very rapid and significant decline in the U3 unemployment rate over the coming ten-months, towards a 2021 year-end rate of 3.91%. John discusses the implications of the data for a 2s-30s Treasury yield curve steepener and a more nuanced 5s-30s Treasury yield curve flattener investment stances.

Disclaimer: www.mufgresearch.com (PDF)