Interest rates for 2010 & 2011. Where are they heading?

[markw1]

Whats your guess, views and reasons?

[markw1]

Floating to be under 7% for 2010 and at least 6 months through 2011. 2 year to 5 year to be between 8 and 9%

Reasons. More demand, banks having to offer higher rates to depositers and increase in OCR.

[spurner]

Minimal increases for 2010 and moderate increases during 2011.

Bank lending is very tight at present, so there is less necessity for the RB to increase the OCR. Also, more/most people are on very short term rates right now, so a small increase in the OCR will have a more measurable impact, and sooner than any previous increases have.

[ENP]

Up. Aussie are doing it. We are their jelous little sister and they are the big brother.

[speights boy]

The big brother who bought a plot of land up in the hills a while back, and is making a tidy profit from selling what lies beneath.

The jealous little sister who buys things she doesn't need, with money she doesn't have, to impress people she doesn't like.

OCR in Aust to be 3 to 4 % higher than NZ, with the Aussy worth close to 1.40 NZ by Dec.

That's my guess
SB

[donna]

Unemployment rate steady at 5.3 % for the Aussies I see - where USA is around 10 %. 40,000 jobs created in Australia over the last 2 months. I am sure our figures are no where near as healthy so I guess the OCR will remain steady for now aye.

Cheers,

Donna

[ENP]

http://www.rbnz.govt.nz/statistics/0135595.html

This is quite interesting....

Average inflation is 2.7% for the last 10 or so years and also for the last 100 or so years.

That's quite high on savings (you would need to earn 4.1% interest if you were on the 33% tax bracket not to lose purchasing power over time)

It also means that a $200,000 mortgage would be worth much less in todays dollars the longer your term is.

Give it a go. Not sure if it has too much to do with where interest rates are going but it's semi-related.

Also these ones...

http://www.rbnz.govt.nz/statistics/e.../download.html

http://www.interest.co.nz/charts/gallery7-40.asp

[Mark_B]

On 11 March the RBNZ said:

“Higher bank funding costs have reduced the level of stimulus that would normally be associated with any given level of the OCR. We expect these costs to persist over the projection reducing the extent of future increases in the OCR. Fiscal consolidation would also help reduce the work that monetary policy might otherwise need to do. We continue to expect to begin removing policy stimulus around the middle of 2010.”

The RBNZ is seeing some of its work being done for it.

[Commercial Dan]

I'll go with the opposite view of Economists out there, the OCR is not going up this year, in fact floating rates will be below 7% at least until the end of next year, deflationery environment out there in the world economy.

[fatfishandchipman]

My guess: both long term and short term interest rates will go down.