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Joe Lavorgna: latest market views
Summary
Economist and former senior counselor to Treasury Secretary Scott Bessent, previously chief U.S. economist at Natixis and a member of the National Economic Council staff in the first Trump administration.
Chorus has 6 views from Joe Lavorgna across 2 episodes on Bloomberg Surveillance and CNBC Power Lunch since October 28, 2026.
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Newest first. Every quote is checked against the episode's transcript.
Betting markets underestimate a Democratic sweep: about 235-240 House seats and at least six Senate pickups.
Lavorgna says betting markets do not understand the breadth and depth of a likely Democratic victory. He expects the Democrats to win the House with about 235 to 240 seats. In the Senate they should pick up at least six seats. He argues the races are highly correlated, so a state like Kansas, which he thinks flips, pulls in Iowa and Nebraska. He points to presidential net approval, enthusiasm and generic ballot polling as the basis.
“The problem I have with the betting markets is I don't think they understand the potential breadth and depth of a likely or highly likely Democrat victory. ... they may have 235, 240 seats. In the senate, Democrats probably pick up at least six seats.”at 18:59
The Canada trade war was largely self-inflicted and is turning key states like Michigan against the GOP.
Lavorgna links the trade war with Canada to the midterm outlook. Michigan is an important state for that trade dispute, and he says a Michigan Senate race is in play after a senator spoke out against the tariffs. He calls the mess largely self-inflicted.
“Well, because the trade war with Canada... So it's a real mess. And a large of it, a lot of it, I think, was unfortunately self inflicted.”at 20:07
Gridlock is bad: longer shutdowns likely, and the debt ceiling breaks within the next year.
Lavorgna says this gridlock is not the good kind. The political divisions and divisiveness are worse than before, so shutdowns could last longer. The debt ceiling is a further risk, since it will break within the next year and could make things much worse.
“The gridlock is not good kind of gridlock. It's bad gridlock because the political divisions and divisiveness are worse. Things like shutdowns could be longer. We've got a debt ceiling that's gonna break up the deal within the next year.”at 22:40
The economy is an inflationary boom, not disinflationary; real wages fall and housing affordability is at record lows.
Lavorgna says the economy is booming but it is an inflationary boom, not a disinflationary one. Affordability and the cost of living are declining as real wages fall. Even though it is not in the inflation data, first-time home-buyer affordability is essentially at an all-time record low. He says the American worker is suffering, which he sees as the main reason Republicans will lose.
“The economy is a boom. It's just not a disinflationary boom. It's more of an inflationary boom... declining real wages... first time housing affordability, it's essentially all time record low.”at 25:21
Warsh's push to drop forward guidance adds risk premium but gives the Fed flexibility and limits capital misallocation.
Lavorgna says Warsh wants to get rid of forward guidance. That adds a risk premium to markets, which people dislike. But he argues it gives the Fed flexibility and minimizes the chance of the kind of capital misallocation seen in the last few cycles. He also jokes that the dot plot can be changed at will, so it has little value.
“The chair really wants to get rid of forward guidance and add risk premium to the market, which you know, people don't like. But it does, I think, the Fed some flexibility. It minimizes the chance of great misallocation of capital.”at 26:53
CNBC Power Lunch: Fed Holds Rates as Warsh Weighs Inflation, AI and December Hike Odds 10/28/26 ·
The Fed watches AI full time; the boom is driving equities via wealth effects and reinforcing capex.
Lavorgna says the Fed is watching AI full time and every day. He argues AI is driving the equity market, which has positive wealth effects that support spending. He also says AI is reinforcing capex, meaning investment in AI infrastructure.
“Full time, every day, they're watching it... It's driving the equity market, having positive wealth effects. It's obviously reinforcing the CapEx.”at 28:56
CNBC Power Lunch: Fed Holds Rates as Warsh Weighs Inflation, AI and December Hike Odds 10/28/26 ·
Shows
- Bloomberg Surveillance · 1 episode
- CNBC Power Lunch · 1 episode
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