Deutsche's LaVorgna sees "swift and violent" rise in rates

|By:, SA News Editor

Joe LaVorgna's forecasting has been less than on point for awhile, but every dart thrower hits the bullseye once in a while, and the Deutshce Bank chief U.S economist sees a sharp rebound in the economy this quarter.

Pointing to examples from June-July 2003 and May-June 2013, LaVorgna says the rise in rates will be dramatic and fast. "Each instance saw an unexpected and substantial sell-off in interest rates that was the direct result of a shift in investors’ expectations of the path of monetary policy."

The catalyst could be the economic data, or maybe the Fed itself wants to suck some of the froth out of the market by taking a hawkish stance, says LaVorgna.

"More importantly, we believe that it will be obvious to the FOMC sometime over the next few months, that policymakers’ soft targets on unemployment and inflation will be met much sooner than what was built into the last publicly available forecast in March."

The 10-year yield is lower by four basis points on the session to 2.50%. TLT +0.7%

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