The fiscal story that has not received attention

The projected government deficit continues to fall. This is a good thing if you fall into the camp that deleveraging has to continue. The large deficits after the Great Recession was the government take on debt that was being reduced by consumers. However, if you believe the government needs to help the economy with more growth, this is a tale of fiscal tightness that impedes growth. The reversal of tax cuts has increased revenues for the government. No one seems to want to offer any new cuts to improve growth. No one is offering infrastructure development at the current low rates. 

The macro story is that the fiscal policy is not helping with growth so there is little reason to expect the output gap to close and rates to move higher. The new normal will continue.