Consistent with expansionary fiscal policy plus tariffs hitting a non-passive Fed reaction function.
Figure 1: TIPS constant maturity 5 year yield (blue), five year breakeven (Treasury minus TIPS) (red), both in %. Red dashed line at election. Source: Treasury via FRED.
The breakeven rises by 11 bps since election day.
Figure 2: DXY dollar index (blue), Fed broad dollar index (tan), both normalized to 10/14/2024=1.. Red dashed line at election. Source: Fed via FRED, Tradingeconomics.com.
The dollar index is up 2.4% since election day.
