Over the last year, it has been a challenging environment for bond investors as interest rates continue to grind higher. Inflation readings registering multi-year highs are certainly one factor causing higher borrowing costs. However, perhaps the biggest influence on higher rates is the shifting supply and demand dynamic from fiscal and monetary policy changes. On the fiscal side, the tax overhaul, along with increased military and domestic spending, is expected to significantly widen our budget deficit, which means a surge in treasury borrowing.

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