I don’t think an uptick in inflation means higher nominal interest rates. Sure if we have 10% inflation (but we won’t), but not a spell of 3 or 3.5% inflation.
There’s no economic rule that savers are entitled to risk-free positive real returns, but I often think people feel that way anyway.
3% inflation, 0.75% 10-year treasuries, and sub-3% 30 year mortgages I think is very possible for 2022-2024.
Semi-related: after loving taxable munis for many years, I am gradually transitioning to NCA, a tax free California muni bond fund. The giant surplus probably means less bond supply, and Biden’s high-income tax increase will be more demand.
