A growth recession is the only way?

-Source-CNBC- Wall Streets bond trading last week ended up on an interesting note: In spite of accelerating consumer and producer prices fixed-income markets showed a yield curve with declining inflation expectations. Bond yields long-term interest rates consist of real interest rates plus an inflation premium that investors demand for holding fixed-income assets of longer maturities. That inflation premium reflects buyers expectations of price stability as they look for inflation-adjusted investment returns. On the face of it therefore the current yield curve means that the bond markets are trusting the U.S. Federal Reserves monetary policy to keep inflation under control for the foreseeable future. A less flattering view could also be that investors are expecting the Feds acquiescence in the economys lackluster growth scenario a thought sharply at odds with U.S. President Donald Trumps expectation of soaring demand and output at annual rates of 5 percent in the months ahead. Looking at the Fed there are a few things to think about. First the real and effective federal funds rate of 1.9 percent is negative when corrected for the core consumer price inflation of 2.4 percent or zero if deflated by the core private consumption expenditure gauge of 1.9 percent.