Interest rates?

What do people think will happen to interest rates over the next year?


Are the current extremely low rates sustainable or will home buyers find themselves up a certain creek when rates shoot up?

the rates will go up 100% for sure! will they double?


i would say a 50% chance to double, and another 40% chance for an increase of 25%. very small chance to see less than 25%, i believe.


all driven by liquidity being pumped into the systems and not creating enough demand, resulting in inflation being used to absorb the debts

Exchange Fund Bills with a maturity of 1 year yield 0.081%, so that implies that rates will stay more or less unchanged very low for the next 12 months.


I don't know where cookie09 gets his/her insights or knowledge from, but the market certainly contradicts the "100% for sure" claim.

US yield curve was my basis http://www.bloomberg.com/markets/rates/index.html because i correlates better with the prime rate which is relevant for property transactions.


in addition, i have a personal conviction that the liquidity which was being pumped into the markets early this year is not generating enough consumer demand as many economic indicators are not really changing gear as much as desired.


if this does not happen by say Q4 latest (christmas sales anyone?) we might soon be faced with a situation where (US) govt has to decide to pump either more money in or let it be - in either case people will worry about the risk premium their are getting on their treasuries.


of course you might call for the help on china here, but i do not believe into decoupling at all.


so, yeah, there is a chance that rates will stay flat or flattish for a while still, but until some of the economic indicators are going green, i do not think it will stay like this for long