Lance Roberts Publishes Analysis on Fed Over-Tightening Risks
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Lance Roberts published an analysis stating that after the Federal Reserve raised its benchmark interest rate to 3.75%-4.00% on September 16, the 10-year U.S. Treasury yield has risen to 5.3%, the highest level since 2007, with long-end rates having tightened spontaneously, and each subsequent rate hike will amplify the risk of excessive tightening. The market currently expects the Federal Reserve to hold steady at its October 28 meeting, but is still pricing in approximately a three-quarters probability of a rate hike by December. Lance Roberts stated that if the Federal Reserve delivers the rate hike magnitude expected by the market and historical patterns hold, economic distress is expected to occur from late 2027 to mid-2028; since 1989, the average lag between the Federal Reserve's last rate hike and a recession has been approximately 14 months, ranging from 10 to 18 months.
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- ZeroHedgeFed Over-Tightening: How Much Buffer Remains Before Risks Emerge
This article is written by Lance Roberts and republished via ZeroHedge. It analyzes that after the Fed raised rates to 3.75%-4.00% in September, the 10-year U.S. Treasury yield has risen to 5.3%, the highest since 2007. The author argues that long-end rates are already tightening spontaneously, and each subsequent rate hike will amplify the risk of over-tightening.
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