Citigroup Strategist Believes U.S. Yield Curve Steepens

The video discusses the steepening of the US curve due to rising deficits and potential exogenous events. It analyzes the likelihood of Fed rate hikes, considering strong CPI data and the impact of a stronger dollar. The discussion also covers the implications of higher deficits and tax cuts under the Trump administration, predicting increased treasury supply. Finally, it explores potential errors in economic predictions, emphasizing the role of sustained inflation and consumer spending.

What is one of the primary reasons for the steepening of the US curve?

• Lower interest rates

• Stable economic growth

• Higher deficits

• Decreasing deficits

How many rate hikes are expected this year according to the analysis?

• Two

• Four

• Three

• One

What could be a consequence of the Fed being too aggressive with rate hikes?

• Decreased consumer spending

• Increased inflation

• Stronger dollar

• Weaker dollar

What is a potential impact of the border tax adjustment if implemented?

• Decrease in deficits

• Some revenue offsets

• No effect on revenue

• Complete offset of tax cuts

What could cause the analysis to be incorrect regarding economic growth?

• Lower inflation rates

• Sustained momentum in inflation and spending

• Decreased consumer spending

• Reduced market optimism