Fed Over-Tightening: How Much Runway Is Left Before It Bites?

Fed Over-Tightening: How Much Runway Is Left Before It Bites? Authored by Lance Roberts via RealInvestmentAdvice.com, The risk of Fed over-tightening rises when 5% Treasury yields, a thin savings cushion and a hike-cut-hike Fed all converge at the same time. The Fed raised rates in September, and the 10-year Treasury yield has since topped 5.3%, the highest since 2007.  That combination raises a question the market isn’t asking loudly enough. If long-term rates are already doing the tightening, does every additional hike from here raise the risk of Fed over-tightening? I think the answer is yes. What’s more, the data suggest the “runway” before the damage shows up is shorter than most assume. On September 16,...

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