Odd Lots · Thursday, August 27, 2026
Jeffrey Schmid stated that while small rate increases are rarely the sole reason for a company to cancel a factory build, they can influence shorter-term decisions like inventory pre-buying. He noted that financing and leverage for long-term projects are typically based on a longer-dated view, making the 10-year Treasury yield a more significant benchmark for such decisions.
“Very rare. However, I will say this, that those, those decisions are much more of a long dated decision. So that's why the 10 year is such a benchmark because you're really, you're making that decision for 10 and 20 years and the financing and the leverage of capital. becomes much more of a long-dated kind of thing.”
“Now, I will say this. It's much more sensitive to things like current asset stuff. So decisions on, should I pre-buy inventory? If I'm going to pay another 25 or 50 basis points on my line of credit, maybe I stall that decision. So that's when the restrictiveness of the short rate starts to influence more of the current decisioning in the market.”