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Trump speaks — What you need to know in markets on Wednesday

Myles Udland

The economic calendar is barren on Wednesday, but that doesn’t mean there will be no market-moving event.

Around 11 a.m. ET, President-elect Donald Trump is expected to hold a press conference, and it could be move markets.

Given that Trump’s comments are likely to be off-the-cuff, markets will be paying close attention, especially on any discussion around potential tax proposals, the repeal of Obamacare, and any infrastructure proposals.

The ‘bond king’ speaks

Jeff Gundlach, CEO of DoubleLine Funds, is known as the new “bond king,” picking up the title once held by Bill Gross.

And in a webcast held Tuesday, Gundlach took a jab at Gross’ call out earlier in the day that a move from the 10-year Treasury yield above 2.6% would mark the end of the bond bull market.

Gundlach said that 3% is really the level we need to see bond yields crack before we can call the end of the bull market, which began back in the early 1980s. If the 10-year moves back above 3% it will be the end of lower-highs in the recent trend and signal, finally, the end of an era.

Source: DoubleLine Funds

We wrote late last year that Michael Hartnett, a strategist at Bank of America Merrill Lynch pegged July 11, 2016 as the day the bond bull market end. And while yields have not revisited the record lows hit that day, a sustained move higher in yields doesn’t seem likely if the inflationary policies the market believes Trump will pursue come to pass.

Throughout his webcast on Tuesday, Gundlach emphasized that all the signs point towards the US economy entering a more inflationary period going forward. And with higher inflation will come higher rates.

Myles Udland is a writer at Yahoo Finance. Follow him on Twitter @MylesUdland

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