A popular consensus right now suggests that increased expenditure combined with elevated inflation will naturally drive asset values upward. However, we should also consider a compelling alternative perspective.

When inflation climbs, Treasury yields frequently follow suit. As the payouts on Treasuries reach a certain threshold, the motivation for individuals to accept the volatility of stocks begins to diminish. Eventually, the market hits a specific tipping point where these risk-free investments simply become too appealing to pass up.

At present, it appears the broader market is largely underestimating this exact scenario.