There has been a big push by central bankers around the world to force interest rates to below zero in recent years. In Europe and Japan rates indeed fell below zero. The results are mixed at best as the Federal Reserve in the U.S. did not follow suit.

Now Bank of America and others think the U.S. 10 year treasury will be at 1.5% by the end of 2021. Traders are removing their bets on negative rates next year as normalcy appears to be making a comeback. Optimism concerning the economy and vaccine effectiveness is the reason for a healthier financial system.

A return to a normal yield curve is underway as seen in the spread between the 2-year and 10-year treasury which has been widening, a clear single that better times are ahead.