US Fixed Income: New year, plenty of new acronyms

Right out of the gate we were all transfixed by the US Senate runoff in Georgia. At stake was control of the Senate, ultimately leading to the Democrats taking control of Congress. Additionally, we all became experts in the nuanced parliamentary procedure known as the budget reconciliation process. By the slimmest of margins, Congress was able to pass a highly controversial and unprecedented $1.9 trillion stimulus package, the American Rescue Plan (“ARP”). As we are facing what we view as an expensive market across many of the fixed income sectors, there is more political maneuvering for yet another multitrillion dollar program to revitalize our crumbling infrastructure, the $2 trillion+ American Jobs Plan (“AJP”). Since the announcements of the latest stimulus package and infrastructure plan, economists have been quickly revising GDP forecasts from 4% to as high as 7%. These are levels of growth on par with China. I think it is safe to say that we are at the infancy of what is most likely to be one of the biggest US economic booms our generation has ever seen, with a ripple effect across the world for US trade partners.