Originally Posted by NameTaken2
lsbcal and brewer12345, thanks for your replies.
I understand the duration/rate rise calculation to project the change in bond price. Interested to know if there's any consensus regarding an estimate for how much rates will rise?
To be flip the consensus prediction is reflected in the bond market pricing.
Now my personal prediction is that the 10 year T bond rate will rise 3-4% over the next two to four year (i.e. pretty steep.) This last year we saw a ~1% rise in the 10 year from 2% to 3%. So my new prediction is 2-3% increase over the next one to three year. This would put the 10 year at slightly above the historical average, which I believe is justified due to the challenges of reversing 5+ years of unprecedented expansion of monetary supply.
I should quickly add that I've be confidently making this prediction since the end of 2009 and 2013 is the first year I've been close to being right. The other years I was dead wrong. But like a broken clock I should be right once a decade (I hope).
My fixed income is Pen Fed CD, and 3 small legacy bond positions, and decent chunk of now short-term corporate inflation protected bond and 75-80% equities.
I remain often wrong but seldom in doubt..