The yield curve has taken a strong bullish move as a result of the election and the Covid-19 vaccine progress. The long end of the Eurodollar curve is nearly back to the pre-Covid level.

The date of the first-rate hike remains in mid-2021, but the escape velocity has increased significantly. Forward inflation breakevens remain level at about 1.6%, which suggests that the recent improvement has been due to real shocks. The Fed probably still has room for more traditional accommodation.