Interest rates

[jrcase]

Hello. I recently forund this forum and I am so glad I did. I really thought I was in decent shape until I have read some of the members savings amounts on here. Makes me work that much harder to fulfill my dream of early retirement. Anyway....

It is no secret that inflation is rising (and fast) but the Fed is still determined to lower rates. I think this will just fuel inflation more and more resulting in a need to raise them later at just an agressive rate. I would like to know your best educated guess as to how high you think the 10 year and 30 year treasury yields will end up after all is said and done after fighting the coming inflation. I dont think it will get as high as the 70-80's, but I suspect they will be in the high single digits in a couple of years. I would like to know what you think??

 

[brewer12345]

The world is ending! Fashion yourself a tinfoil helmet and head for the root cellar!


Seriously, your crystal ball works a lot better than mine, since you know that inflation will rise and so will long bond rates, so you'd be in a better position to tell us exactly how high the long bond is going.

 

[Notmuchlonger]

6.25% in 4 years. We will enter a smoking bull run starting in 2009. I can only see till 2012 since thats when the world ends.

 

[jrcase]

Nice welcome guys. All I was doing was asking a simple question. There is no need in being rude. This forum just got deleted from my favorites.

 

[soupcxan]

Tough crowd here...it's not like he was peddling annuities!

 

[REWahoo]

Maybe we should remove brewer from the Welcome Wagon Committee...

 

[Notmuchlonger]

Bleh I gave a honest assessment. The end of the world is Dec something 2012 according the Mayan calender. I forgot internet is serious business.

 

[brewer12345]

What's wrong with suggestions to investigate one's root cellar?


"It wasn't me! It was the one-armed man!"

 

[Animorph]

Well, you can borrow a lot now at low interest rates and pay it back later with inflated dollars. Or you can buy TIPS. That's about it for my ideas. However, after interest rates go up you could buy bonds.

Dan

 

[retire@40]

Hello. I recently forund this forum and I am so glad I did. I really thought I was in decent shape until I have read some of the members savings amounts on here. Makes me work that much harder to fulfill my dream of early retirement. Anyway....

It is no secret that inflation is rising (and fast) but the Fed is still determined to lower rates. I think this will just fuel inflation more and more resulting in a need to raise them later at just an agressive rate. I would like to know your best educated guess as to how high you think the 10 year and 30 year treasury yields will end up after all is said and done after fighting the coming inflation. I dont think it will get as high as the 70-80's, but I suspect they will be in the high single digits in a couple of years. I would like to know what you think??

The fed is more concerned right now with the short-term economic problem than the long-term inflation problem.

If inflation gets out of control, you will see a parallel to the late 70's, early 80's. To combat inflation, interest rates will need to be pushed up. This in turn will lower real estate prices to compensate, kill the stock market for a while, and someone will write a book on how to retire in their 30's while investing in high-rate bank CDs. Then rates will get lowered, the stock market will reach new highs, real estate will rebound, etc.

How's that for a crystal ball forecast?

 

[retire@40]

Nice welcome guys. All I was doing was asking a simple question. There is no need in being rude. This forum just got deleted from my favorites.

You must be the sensitive and creative type.

 

[Jarhead*]

Maybe we should remove brewer from the Welcome Wagon Committee...

Actually, the New Joisey Brewmeister, has pretty darn good instincts, and

is generally a good "spotter". Of course, nobody bats 1,000, so once in a

while we have to live with "Collateral Damage".

 

[Independent]

First, I agree with REWahoo:

Maybe we should remove brewer from the Welcome Wagon Committee...

Second, I think that predicting interest rates is like predicting the stock market. If I wanted to do it for the entertainment value, I'd take a little money and make bets in some sort of derivatives. But I don't think my crystal ball is good enough to actually put serious money on my guesses.

As far as I can tell, the market has already discounted all the information that's available to me, so I can't find bargains. I don't know if long bonds or interest futures are over-priced or under-priced today, and I don't think I have a reliable way of deciding.

You could read the active thread "Am I going through a phase?". It's about individual stock picking, not about the general trend in interest rates, but I think it still reflects a relevant attitude.

Maybe you'd find a different attitude in the "Stock Picking" room.