An interesting chart from a large German bank and you can consider causality without confusing correlation.
The post-COVID recovery has been extremely unusual. The chart below shows the differential between US consumer optimism on jobs (at record highs) versus income (close to record lows). This consumer differential correlates remarkably well with the US yield curve and perfectly summarizes the state of the economy after COVID: a very tight labour market (but not all for good reasons) and very strong inflation compressing real incomes. The combination is historically associated with late-cycle dynamics: Fed hikes, a sharply flattening (indeed, inverting) yield curve and a stronger dollar. Do supply pressures ease next year bringing inflation down, or is the Fed far behind the curve with a lot of catching up to do? It's the top question for 2022.
A top question, indeed…Interesting how the SELLSIDE feels good these days simply posting (2s5s, 30yy) LEVELS or offering scenarios and TOP QUESTIONS, without answers, is the new normal. Fool them once shame on them, fool them twice … ?