Interest Rates

[chook]

https://www.stuff.co.nz/business/125...16-jump-in-gdp

"Expectations of an OCR hike could feed into mortgage rates and be felt by home-owners far sooner.

ASB described the GDP gain as “whopping” and warned stronger-than-expected domestic demand coupled with growing cost pressures, were a potent mix for inflation."

[Jeffa]

I like how banks warn us we're all going to lose our houses and our impending doom if we don't listen to them.

I really love banks there so caring.

How Treasurys are performing

• The 10-year Treasury note TMUBMUSD10Y, 1.509% was yielding 1.509%, compared with 1.569% at 3 p.m. Eastern Time on Wednesday and marking the steepest slide since June 4, according to Dow Jones Market Data.
• The 30-year Treasury bond TMUBMUSD30Y, 2.099% was at 2.099%, versus 2.211% on Wednesday, notching its biggest rate retreat since April 15.
• The 2-year Treasury note TMUBMUSD02Y, 0.217% was at 0.211%, versus 0.203% a day ago.

[chook]

And more,... forget 2023 &2022 rate rises will happen this year..

https://fortune.com/2021/06/16/feder...flation-rises/

[chook]

"I do think with inflation looking to finally burst loose, that is what all the economicsts are saying.
We will be looking at high inflation and very high 1 year rates in 2023 / 24 / 25.

2024 and 2025 if you have high short term rates, and you cant deduct interest cost as an expense, its gonna hurt.

You are right on the button BK, you just forgot to include 2022..

[Perry]

Long-term home loan interest rates increasing
21 July 2021 (The NZ Winter Solstice)

Long-term home loan interest rates are rising, and not everyone is convinced it’s fair. Reserve Bank data shows the average five-year mortgage rate taken out in May was just over 4 per cent, compared to 3.7 per cent in February. Four-year rates rose from an average 3.69 per cent in February to 3.79 per cent. The average price of short-term lending fell over that period. Rates up to about 4.4 per cent are now being advertised for five-year fixed terms.

I wonder from whence comes the notion that banks should be "fair?"

[Jeffa]

"Benchmark 10-year U.S. Treasury yields fell to the lowest since early March at 1.4110%, while those on 30-year bonds slid as low as 1.9990% for the first time in more than four months.

The yield curve - measured by the spread between two- and 30-year yields - was the flattest since early February.

Japan's Nikkei led declines with a 3.3% drop and dipped below 28,000 for the first time in a month, while msci broadest index of Asia-Pacific shares outside Japan fell 1% in early trading.

Chinese blue chips opened 0.4% lower, and Australia's benchmark slid 1.8%."


Talk of the fed raising rates is already spooking the Asia/Pacific markets and nothings even happened yet!.. what do they think is going to happen to the economy if they actually do raise rates?

[Wayne]

Talk of the fed raising rates is already spooking the Asia/Pacific markets and nothings even happened yet!.. what do they think is going to happen to the economy if they actually do raise rates?

Markets are forward-looking - any change will be built in by then.

[Jeffa]

Markets are forward-looking - any change will be built in by then.

Yep I agree, personally I wish they would jack rates up now so they would be back to zero in 12 months.. just in time to refix .

[donna]

^^ Do you still think 2022 won't see a rate rise of short term mortgages Jeffa?

cheers,

Donna

[Wayne]

^^ Do you still think 2022 won't see a rate rise of short term mortgages Jeffa?

cheers,

Donna

By 'short term' you mean 6mth and 1yr?
OCR likely to rise mid next year rather than late.
So interest rates likely to rise early next year - long rates already up.

[Bluekiwi]

Yep, so 1 year rate could go from 2.19 to 2.45 in 1 year.
I am hoping as I went short on some.

But in 2 years time, say June 2023, well that 1 year rate should be around 2.7 to 2.95, or even more ?

From now, until then, those 3 and 5 year rates will start going higher.

Just look at this inflation surge coming through, I dont think its a short term look through, as demand will rise at same time higher for longer.

Question is, will global production ramp up in time between 2022 and 2026 when my fixed rates expire

I am hoping with angst that in 2026 inflation is under control

[Jeffa]

^^ Do you still think 2022 won't see a rate rise of short term mortgages Jeffa?

cheers,

Donna

2022/23 you will still be able to find rates in the 2% range.

Stop be greedy my first mortgage was 7%.

[Jeffa]

Question is, will global production ramp up in time between 2022 and 2026 when my fixed rates expire

I am hoping with angst that in 2026 inflation is under control

5 year bond rate at 1.117 and falling maturity 2026

If short term rates eventually increase long term rates decrease.

Bond markets already pricing in transitory inflation.. flat.

[Perry]

Perry puts his moderator hat on . . .

NOW HEAR THIS

Too many of the recent posts in this thread have not been about interest rates. Not even close.

I have moved them to a new thread called . . .

The Labour Greens Commie Coalition & The Vagaries of 2021

Some posts were marginal / ambiguous / difficult to decide on whether or not to move or let be.

If any PT Forumite is of the view that moving their post was an error, PM me a link to it and I'll re-assess it.

I confess my contributory culpability and have agreed to 'diversion.'

Please - only add posts to this thread which are about interest rates.

Any posts which transgress that plea will be moved.

[Jeffa]

I don't think interest rates will increase to 4.20 because 4.20 is too high man..