Whatever happened to rising interest rates?

[FlyerInHi]

[quote=EconProf]
I see the opposite.
Interest rates “can’t get much lower”. That is exactly what forecasters have been saying for years now, and interest rates continue their downward trend. I think they will trend lower for most of the year. Reasons…far lower interest rates in most of the developed world. In Europe they are close to zero. European investors put their money here for a better interest rate and a currency play as the dollar continues to rise with our relatively stronger economy.
The lower interest rates will continue to lower our cap rates and prop up values of real estate in all categories.[/quote]

I agree with you, econprof. In one year, we will find out.

The stronger dollar also lowers the cost of imported goods, holding down inflation.

[FlyerInHi]

What’s your thinking now that the Fed raised rates?

I officially declare people who predicted dollar debasement and hyperinflation utterly wrong and discredited.
The free markets didn’t get ahead of the Fed and the Fed didn’t run out of tools.

[spdrun]

About bloody time. Hope to see 30-year rates hold steady above 4% next year!

[spdrun]

.

[The-Shoveler]

Just checked 30 year rates, looks unchanged but I did not look yesterday.
3.95% currently from what I could see.

Anyway If the housing market starts to be affected I think the fed will reverse course very quickly.

[FlyerInHi]

[quote=The-Shoveler]
Anyway If the housing market starts to be affected I think the fed will reverse course very quickly.[/quote]

I think the Fed was kinda forced to do it after telegraphing for so long. But the world economy is not doing well. They will reverse course if needed, although I doubt housing will be affected much by this hike.

[spdrun]

Fortunately, once a correction starts to snowball, it will take a while for even lowered rates to re-inflate things. 🙂

[The-Shoveler]

IMO a snow ball rolling down hill is very unlikely given most have fixed rates.

I think we have seen before that those who can will pull their listings if they don’t get their price, and builders are not building enough to get caught with their pants down.

[FlyerInHi]

[quote=The-Shoveler]IMO a snow ball rolling down hill is very unlikely given most have fixed rates.

I think we have seen before that those who can will pull their listings if they don’t get their price, and builders are not building enough to get caught with their pants down.[/quote]

Or it could be an old fashioned employment led recession (unlike the housing implosion Great Recession). People lose jobs, can no longer service mortgages and have to sell.

[spdrun]

Prices are set by buyers not sellers. If there are no takers at an offered price, the value is lower. Regardless of whether the listing is pulled or not.

[spdrun]

..

[The-Shoveler]

Sure but you can only buy whats for sale,

Supply/Demand type thing.

I would agree there maybe some temporary home price reductions if rates go up much. But IMO I don’t see anything even remotely like 2007-11 occurring.

Recessions do happen though, but IMO the FED will be on it in a heart beat this time.

Weird the builders were up on the news.

[FlyerInHi]

spd, Bernie doesn’t like the rate hike. Are you still with him?

Bernie Sanders Slams Federal Reserve’s Rate Hike – TIME
https://apple.news/AH8fKTTc8R9uIrxcmCwMqxA

[Anonymous]

[quote=FlyerInHi]I officially declare people who predicted dollar debasement and hyperinflation utterly wrong and discredited.
The free markets didn’t get ahead of the Fed and the Fed didn’t run out of tools.[/quote]

So whatever happened to partypup?

[moneymaker]

What is most interesting to me is that Europe and US are moving in opposite directions as far as rates are concerned. We are emphasizing saving more while Europe is trying to invest more. The question is where will our money go and where will Europe invest, assuming things continue on their current path. Both could be the right path for now.

[Author]

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