Something Always Breaks... Eventually

"Something always breaks."

That was the warning in a CNBC story last week, citing 16 times since 1970 that a rapid rise in rates came with a financial crisis.

With the 10-year Treasury at 5.18%, up 121 basis points since February, it's a fair question.

So, we ran the numbers.

What we found:

→ There weren't 16 rapid rises in the 10-year since 1970. We count 32.

→ 69% of the 16 on the list were followed by a 10%+ drop in the S&P 500.

→ 69% of ALL 15-month stretches since 1970 contained a 10%+ drop.

Same odds. A rate spike alone doesn't change them.

What does matter: the size of the move and how hard the Fed is pushing. Rises of 200+ basis points, or 100+ basis points of Fed hikes, are where the real damage has shown up.

Today: +121 on the 10-year. +25 at the Fed.

Not there yet. But the stress is already building beneath the surface of the index, and we're watching three specific signals from here.

Read more here: https://insightwealthgroup.com/the-weekly-insight-something-always-breaks-eventually/