FTN Financial's Jim Vogel said that US......>

US TSYS: FTN Financial's Jim Vogel said that US "real interest rates - taking

out the expected impact of inflation - signal roughly 60%/40% odds for passage

of tax reform. One of the reasons for curve flattening between 5s and 10s since

the end of September is the common sense reaction that the positive impact of

the tax cuts discussed should max out between the 2019-2023" time frame.

- He adds that "the 2-month increase in real 5-yr rates approaches the initial

euphoria of the post-election period and it has momentum to climb higher. 10-yr

real rates have increased as well but the term premium is much lower than 12

months ago because i)inflation has been tame; and ii) sustained equity gains

require a risk buffer position in high- grade fixed income."