Hi All,
Just wondering what predictions people might have for how interest rates will go this year.
I've kept clippings on this subject for years (yes, we all have our problems!) and it's very interesting to see how inaccurate most forecasters have been. BIS Shrapnel, for example, are hopeless when it comes to crystal ball gazing on interest rates.
So what do you think's going to happen as this recession starts to really bite? Sure, rates are likely to go down a bit further, but for how long? And is anyone thinking of fixing now?
Have a guess – it'll be interesting to see who was right in the months to come.
No point in my having a guess as I have little skill when it comes to understanding economics – though I am trying to get educated.
Cheers,
CarlinI would say another 1 % drop over the next 6 months then stable for the remainder of the year. Maybe some upward movement in 2010. A 6% 10 year fixed rate will have me pushing foward the house hunt. 1 % to go.
In the time I've been involved with IPs (since 97) the best fixed 10 year rate I've seen was 6.99% (not sure what the comparison rate was). Has it ever gone lower?
Well dont ask me two years ago I was convinced that inflation would keep rising and that IR's would to, then stay high and consequently fixed my investment loans for 5 years (ooch).
I now think they will drop further and that will be the bottom of the cycle. I wont be surprised if they rise faster than expected though. We are getting the deflation senario drummed into us but I am of the opinion that we are going to be going into an inflationary phase.
Central banks are going to print money until they run out of trees and if you increase the supply of something what does it do the value of it. ? Inflation is the preffered banker solution to a mis-managed economy and I belive that is what they are engineering even though they say the opposite as does the MSM.
to quote Hemingway
The first panacea for a mismanaged nation is inflation of the currency; the second is war. Both bring a temporary prosperity; both bring a permanent ruin. But both are the refuge of political and economic opportunists.
another pearler
The best way to find out if you can trust somebody is to trust them.
Hemingway's one of my favourite authors – thanks for that timely quote. I, too, think the climb back up will be swift – but mine's just a gut feeling.
I would personally say that due to the higher than expected retail numbers combined with the worse than expected drop in new housing they will probably make a cut of 50 basis points in their next meeting plus the fact that the RBA is more content on stimulating the economy at the moment than concerns of inflation.
In the US the rates have dropped steadily and are now almost 0% and that hasn’t helped them.
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