how will interest rates change in the next 5 years?
by Mortgage Rates on Friday, September 17th, 2010 | 2 Comments
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No one can answer that with any certainty.
Although it’s anyone’s guess (even experts can’t predict interest rate levels with any consistency), my bet is that the trend in interest rates will be upward, principally due to continued inflationary pressures (energy costs and growing economies worldwide, e.g. China) and the demand for funds by the U.S. Government (war, disaster and medicare costs).
This prediction does not preclude some major shock which might cause the Federal Reserve to pump money (liquidity) into the system, thus lowering interest rates temporarily.
If I were planning to lock in a fixed rate mortgage rate, it would have been a couple of years ago. If I had not yet done it, I would lock it in now.
The basis for my prediction is an a 25 year career in investments, principally focused in fixed income (bond) investments.