The Message from ECRI’s Leading Indexes of Economic Growth and Inflation:

ECRI leading indexes of global growth and inflation had separately turned up prior to the U.S. election. While the “Trump effect” is real, a major part of the story has to do with these cyclical fundamentals.

In fact, 10-year yields have risen in line with our cyclical leading indexes, with about half the rise in U.S. rates occurring pre-election. Globally, most of the rise in yields occurred before the election.

Understanding that economic and inflation cycle dynamics are playing a big role in the markets today means that – while the upturn has everyone’s attention –we now need to be on the lookout for reversals in the current growth and inflation cycle upturns.