Kaijiu Macro: It is unlikely that the disconnect between US economic data and the market will continue.

Jonas Goltermann and Thomas Mathews of Capital Economics stated in a report that the disconnect between strong US economic data and the fearful US financial markets is unlikely to persist. These economists said, "We expect a rebound in the US stock market, US bond yields, and the US dollar." They noted that the recent decline in US bond yields is difficult to reconcile with January's labor market and inflation data. The former was unexpectedly strong, while the latter was not as weak as market reactions suggested. In a broader sense, the US economy appears to have started off well in 2026, with most data better than widely expected. They predict that this trend will continue in the coming months. They stated that under normal circumstances, this would lead to an increase in yields, rather than a decrease.