Name: SMBC's Joe Lavorgna: I believe the Fed will, and needs to, raise rates in September
Uploaded: 2026-08-31T13:27:27+00:00
Duration: 581 s

Speakers

Joseph Lavorgna — Former Chief Economist, National Economic Council

Summary

Joe Lavorgna discusses Iran sanctions, the G20, and the U.S. economy. He argues the Fed will and should raise rates in September to reverse last year's cuts, with short rates rising and long rates falling. He also highlights Treasury buybacks as liquidity support and expects manufacturing and small banks to benefit from pro-growth tax and regulatory policy.

Lavorgna says secondary sanctions on Iran have a real chance of working due to Iranian hyperinflation.
He sees the U.S. economy as booming and the envy of the world.
He expects the Fed to raise rates in September because growth could be near 5% and last year's cuts were unnecessary.
He argues a prudent hike would lower long-end risk premiums and long rates.
He says Treasury buybacks add liquidity and markets may react before the September 9 start.
He expects full expensing and friendly regulation to accelerate manufacturing and small-bank lending.

Ideas

Joseph Lavorgna Former Chief Economist, National Economic Council 3:08

U.S. economy booming; broad US outperformance.

The U.S. economy is booming and is the envy of the world based on current numbers and trajectory, supporting a broad bullish U.S. growth outlook.

Joseph Lavorgna Former Chief Economist, National Economic Council 4:21

Fed will hike; short rates rise.

Lavorgna expects the Fed to raise rates in September and reverse last year's cuts because the economy is healthy and current-quarter growth could run near 5%, making last year's extra cuts unnecessary. He argues short-term savers will earn more on safe assets like T-bills as the short rate rises.

Joseph Lavorgna Former Chief Economist, National Economic Council 5:42

Treasury buybacks add liquidity; Treasuries supported.

Treasury bond buybacks are a tool to add liquidity during a traditionally volatile August, and markets are forward-looking so they should react before the September 9 start. The buybacks may also mitigate the speed at which rates rise, supporting Treasuries.

Joseph Lavorgna Former Chief Economist, National Economic Council 7:14

Prudent hike lowers long rates; bonds rally.

A prudent Fed hike would lower the risk premium in the long end of the Treasury curve, so long-term interest rates would actually fall even while the short rate rises. This supports long-duration Treasuries.

Joseph Lavorgna Former Chief Economist, National Economic Council 8:37

Manufacturing accelerating on full expensing.

Full expensing for factories and friendly tax and regulatory policies are accelerating U.S. manufacturing. ISM and regional Fed surveys show clear manufacturing acceleration, and industrial production is picking up outside tech, which should lift productivity and wages.

Joseph Lavorgna Former Chief Economist, National Economic Council 9:14

Small bank lending should improve.

Prudent regulatory policies and improving small-business sentiment should boost lending at U.S. small and community banks, making the small bank community a specific beneficiary of the pro-growth policy mix.

This CNBC video, published August 31, 2026, features Joseph Lavorgna discussing XLE, U.S. short-term interest rates, U.S. T-bills, TLT, U.S. long-duration Treasuries, U.S. manufacturing/industrial sector, KBE. 6 trade ideas extracted by AI with direction and confidence scoring.

Speakers: Joseph Lavorgna · Tickers: XLE, U.S. short-term interest rates, U.S. T-bills, TLT, U.S. long-duration Treasuries, U.S. manufacturing/industrial sector, KBE

SMBC's Joe Lavorgna: I believe the Fed will, and needs to, raise rates in September

Summary

Ideas

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