Expectations for a higher yield curve, while elevated, are down from a peak of 66%. Even if the 10-year climbs to 2%, if short-term rates rise faster, the curve could actually flatten, which is bullish for growth stocks.
Bottom line: The flows out of growth and into cyclicals may be overdone, such that a quick spike to 2% in the 10-year is quickly reversed with a flattening yield curve. In this scenario, we could see a renewed multi-week rotation into the growth and tech trades.
Expectations for a higher yield curve, while elevated, are down from a peak of 66%. Even if the 10-year climbs to 2%, if short-term rates rise faster, the curve could actually flatten, which is bullish for growth stocks.
Bottom line: The flows out of growth and into cyclicals may be overdone, such that a quick spike to 2% in the 10-year is quickly reversed with a flattening yield curve. In this scenario, we could see a renewed multi-week rotation into the growth and tech trades.
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