Morning Notes — Steeper Curve

Better-than-expected US economic data plus an improved vaccination pace argue against additional large-scale fiscal relief at this time but it sounds like it’s going to happen anyway. Passing a coronavirus rescue package via budget reconciliation will probably jeopardize the chances for a recovery bill later that includes infrastructure spending.  Expect the increased deficit spending to drive headlines around tax hikes in the days/weeks ahead with Warren now on the Senate Finance Committee and Sanders Chair of the Senate Budget Committee. While tax hikes in the early stages of an economic recovery seem unlikely, the increased focus has the potential to restrain equity multiples going forward.