Thursday, June 7, 2018

US rate hikes could cause a recession

"Well, a lot of industrial commodities have been rallying because of commodities-related circumstances, like aluminum rallies because of the trade embargo against Russia, and so forth. 

But if I look at industrial commodities, I rather have the feeling that they will come down. Why? I think the increase in interest rates in the U.S. on the 10-year treasury note from 1.38 percent in the summer of 2016 to the current level of over three percent, in other words, we more than doubled in the yield in the bond market. 

And for the two-year treasury, we have been going up between 10 and 20 times depending how you measure it.

I think these interest rate increases will slow down the U.S. economy, and probably bring about a recession."