Excerpt from Barron’s:
Population Growth Is Slowing. Why That’s a Problem for the U.S. Economy
December 31, 2020
Dec. 28: As we enter 2021, we are very focused on the Jan. 5 Senate runoffs in Georgia. A Democratic victory in both races puts that party in control of both houses of Congress, along with a new Democratic administration led by President-elect Biden. Our view is that this outcome would lead to more spending—in greater amounts and on a faster pace than if the Republicans hold the Senate, which they can do with a Republican outcome in either race. We think bond market participants will start to discount increased spending, and perhaps a higher inflation rate, and that may cause yields to rise. We believe this will happen even with a Republican Senate, although at a slower pace. President-elect Biden still has good relationships with senators who were in office when he was a senator more than 12 years ago, and those relationships should foster some measure of greater cooperation. We think we’ll see rates back to where they were at the end of last year; but certainly, halfway between where they were then and where they are now is a reasonable approximation of where we think yields will be midyear.
—John R. Mousseau
Continue reading the full story at The Bond Buyer’s site (paywall): https://www.barrons.com/articles/population-growth-is-slowing-why-that-matters-for-the-u-s-economy-51609463700
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