The U.S. economy is growing at about a 6% annual rate, after adjustments, in the current quarter, according to the tracking models of the Federal Reserve Bank of New York. And that comes after robust payroll gains in March of over 900,000 reported on Good Friday, and booming auto sales in the first quarter, despite supply shortages. Ditto for residential housing, with tight supplies of new and existing homes acting as the main constraint.

None of which has escaped the notice of the stock market, with the Dow Jones Industrial Average and S&P 500 cruising to record highs and the Nasdaq Composite climbing back within 1.4% of its peak, reached a couple of months ago. The bond market, for its part, seems to have come to terms with the economy's vigorous expansion. The benchmark 10-year Treasury yield has been in a narrow range of 1.62% to 1.78% over the past month or so, after its steep climb from just under 1% at the turn of the year.

At the same time, investors' mood has improved markedly with the coming of spring. The VIX -- the Cboe Volatility Index -- has retreated to its prepandemic levels, ending at 16.69 Friday. Qualitative assessments also indicate waning fear and increasing ebullience among investors. The Investors Intelligence polling of advisors found 60.8% bullish in the past week and only 16.7% bearish. Bullish readings over 60% and bull-bear spreads exceeding 40 percentage points tend to come around market peaks.

The apparent complacency is making contrarians uneasy. Mark Haefele, chief investment officer for global wealth management at UBS, points to a big options player buying $40 million of calls positioning for a rise in the VIX, the so-called fear gauge, to over 25 in the next three months. Possible worries could be higher inflation and accelerating growth, along with new variants of the Covid-19 virus, he writes in a client note.

On the former score, Jefferies economists Aneta Markowska and Thomas Simons posit in a research note that nonfarm payrolls could surge by as much as 3 million in the April report, due out early next month. That would go a long way toward closing the 8.5 million payroll shortfall since the pandemic began.

A much faster-than-expected recovery in the jobs market, while wished for by all, could move up the eventual withdrawal of monetary stimulus sooner than anticipated. While Fed Chairman Jerome Powell likes to say that policy makers aren't thinking about thinking about paring the central bank's securities purchases, Bank of America economists see the monetary authorities setting the stage for a slowing in bond buying in the second half, starting tapering in the first quarter of 2022, and winding up the purchases by the end of next year. However, the Fed might not be able to taper fully, owing to the risk of a market tantrum, especially in light of what they euphemistically call a "material supply/demand imbalance," owing to burgeoning U.S. Treasury debt, which has expanded by 26% in the past year.

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At the same time, Jason DeSena Trennert, who heads Strategas Securities, worries that a fiscal drag from President Joe Biden's plan to raise taxes "sterilizes the positive impacts of opening and already passed stimulus, leading to an economic environment more consistent with the period of secular stagnation" after the 2007-09 financial crisis.