new york passage long-anticipated u.s. tax overhaul up-ended bond market favorite trade year yield long-dated treasuries shoot high months doubt tax cut fuel inflation many investors confident reversal short-lived view u.s. federal reserve keep raise short-term interest rat even inflation remain subdue make longer-dated treasury bond appeal short-dated ones make so-called yield curve flattener trade bet gap short- long-dated bond yield narrow profitable bet bond market year investors appetite trade drive yield curve flat level decade early week however sharp reversal get underway tax bill passage become certain pave way big government deficit federal borrow great time cash say brian reynolds asset class strategist new york-based canaccord genuity republican-controlled congressional chamber approve tax legislation president donald trump expect sign days ahead treasury market selloff push benchmark 10-year yield nearly 2.50 percent high nine months 30-year yield around 2.87 percent five-week peak analysts reckon jump yield reflect investors demand high compensation term premium case tax cut stoke inflation hurt longer-dated bond long prevail open question though give previous episodes curve steepen last year quickly fade word sharp term premium move tend permanent cornerstone macro analysts say note wednesday late afternoon trade spread two-year 10-year treasury yield 63 basis point versus 60 basis point tuesday around 51 early week even week steepen two-to-10-year part curve flatten nearly 63 basis point year curve flatteners see likely regain popularity long run due low inflation outlook sturdy global demand long-dated u.s. debt short term however may prove choppy trade investors gauge bill impact hard predict yield curve would behave short term big question time level cash flow go government tax reform canaccord reynolds say one factor mountain corporate cash hold overseas part new tax code u.s. multinational company could bring back estimate 2.6 trillion business profit overseas treasury department could benefit tax repatriate money reynolds estimate treasury might receive much 225 billion tax receipt 2018 company bring back overseas profit mean government could issue few two- three-year treasury securities pressure yield low steepen yield curve 2019 say independent government estimate suggest tax plan could add least trillion 20 trillion national debt 10 years treasury department would ratchet borrow compensate shortfalls tax receipt degree bill may spur business investment consumer spend could lift tax receipt cap rise deficit another key unknown shape yield curve go forward still dominant view wall street remain cut provide short-term bump economic growth many analysts expect longer-term curve-flattening trend reassert year ahead accordingly maintain conviction curve flatten go 2018 morgan stanley analysts write note wednesday u.s. tax plan roil popular bet bond market