Will Interest rates go back down?

[Alex_angel]

Does anyone thing that interest rates will go back down to under %6 or is this latest run here to stay?

[5yearwaiter]

If this happens then the real wreck on the US Economy. Already US fed(Greenspan) did enough tear by doing the mistake of Interest rate down. There was a rumour on interest rates may go down to elivate housing!! but seeing the news and situation I don’t think FED can do this at this moment and it turns to a real foolish.

[5yearwaiter]

If this happens then the real wreck on the US Economy. Already US fed(Greenspan) did enough tear by doing the mistake of Interest rate down. There was a rumour on interest rates may go down to elivate housing!! but seeing the news and situation I don’t think FED can do this at this moment and it turns to a real foolish.

[LA_Renter]

In theory if we get strong signs that we are going into a recession, traditionally the stock market will correct and you will have a flight to quality i.e. bonds which will send interest rates down. Usually this results in an inverted yield curve which generally precedes that recession. It also signals the FED is getting ready to cut rates. The wild card we are facing is the global economy. We are looking at probably one of the worst housing corrections in this country’s history yet the stock market is on a bull run and interest rates are rising primarily due to the strong 4% to 6% growth in the global economy. We are also feeling the effects of a 30% drop in the US dollar and traditional foreign buyers of our bonds chasing higher yielding assets around the globe. I guess the answer to your question is “you got me”.

The thought that keeps running in my head is that much of the global economy is dependent on the good ole USA consumer. If the US consumer goes so goes the global economy. Now think about this, higher interest rates at this stage of the housing bubble more than likely will prove to be devastating. Especially California. We just had the weakest May since 1995 which was the weakest May of that entire decade. At this stage of the last housing bust of the early 1990’s the FED was already in the process of lowering rates. What would the housing bust of the 90’s looked like if interest rates were going up?? It makes a case that we are sitting on ground zero of a global economic downturn. Do you think June will be any better when interest rates just shot up?? This is really getting interesting don’t you think.

[LA_Renter]

In theory if we get strong signs that we are going into a recession, traditionally the stock market will correct and you will have a flight to quality i.e. bonds which will send interest rates down. Usually this results in an inverted yield curve which generally precedes that recession. It also signals the FED is getting ready to cut rates. The wild card we are facing is the global economy. We are looking at probably one of the worst housing corrections in this country’s history yet the stock market is on a bull run and interest rates are rising primarily due to the strong 4% to 6% growth in the global economy. We are also feeling the effects of a 30% drop in the US dollar and traditional foreign buyers of our bonds chasing higher yielding assets around the globe. I guess the answer to your question is “you got me”.

The thought that keeps running in my head is that much of the global economy is dependent on the good ole USA consumer. If the US consumer goes so goes the global economy. Now think about this, higher interest rates at this stage of the housing bubble more than likely will prove to be devastating. Especially California. We just had the weakest May since 1995 which was the weakest May of that entire decade. At this stage of the last housing bust of the early 1990’s the FED was already in the process of lowering rates. What would the housing bust of the 90’s looked like if interest rates were going up?? It makes a case that we are sitting on ground zero of a global economic downturn. Do you think June will be any better when interest rates just shot up?? This is really getting interesting don’t you think.

[HereWeGo]

It makes a case that we are sitting on ground zero of a global economic downturn.

Not even remotely.

[HereWeGo]

It makes a case that we are sitting on ground zero of a global economic downturn.

Not even remotely.

[LA_Renter]

“Not even remotely”

I’m open to hearing peoples thoughts on this but elaboration is necessary.

The point I’m making is this the first domino to fall?

[LA_Renter]

“Not even remotely”

I’m open to hearing peoples thoughts on this but elaboration is necessary.

The point I’m making is this the first domino to fall?

[PerryChase]

I too believe that the strength of global economy is keeping interest rates high. Europe, Australia and New Zealand are raising interest rates. Japan maybe next. If the Fed lowers rates, guess where the money will go?

Notwithstanding a housing crash, the US consumers will not stop shopping at Walmart or Target or even Abercrombie or Nordstrom. After all, even if you’re poor, you have to look fabulous! Consumers will cut back on the SUV first. I don’t see housing affecting imports of consumer goods much.

If anything, a housing crash might spur spending on small consumers purchases. Homeowners walk-away from their jumbo mortgages so they’ll compensate and treat themselves to little things.

[PerryChase]

I too believe that the strength of global economy is keeping interest rates high. Europe, Australia and New Zealand are raising interest rates. Japan maybe next. If the Fed lowers rates, guess where the money will go?

Notwithstanding a housing crash, the US consumers will not stop shopping at Walmart or Target or even Abercrombie or Nordstrom. After all, even if you’re poor, you have to look fabulous! Consumers will cut back on the SUV first. I don’t see housing affecting imports of consumer goods much.

If anything, a housing crash might spur spending on small consumers purchases. Homeowners walk-away from their jumbo mortgages so they’ll compensate and treat themselves to little things.

[Anonymous]

I’d say that the fed cannot lower rates. Other countries are raising theirs. If we lower and they flee from the dollar, it falls even faster. That will start affecting the price of imports…just how far down would the Asian nations really peg their currencies to us? If import prices do see a meaningful rise and we slow down spending accordingly, the the global economy would suffer.

[Anonymous]

I’d say that the fed cannot lower rates. Other countries are raising theirs. If we lower and they flee from the dollar, it falls even faster. That will start affecting the price of imports…just how far down would the Asian nations really peg their currencies to us? If import prices do see a meaningful rise and we slow down spending accordingly, the the global economy would suffer.

[Chris Scoreboard Johnston]

I forecast in my yearly summary at the beginning of the year to my clients rising rates into July then declining after that, so I still believe we will see that. No telling about predictions, but it is on course so far. This is the typical seasonal pattern, so no surprise at all. I am surprised at the magnitude, but not the direction.

[Chris Scoreboard Johnston]

I forecast in my yearly summary at the beginning of the year to my clients rising rates into July then declining after that, so I still believe we will see that. No telling about predictions, but it is on course so far. This is the typical seasonal pattern, so no surprise at all. I am surprised at the magnitude, but not the direction.

[Author]

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