πŸ“‰ Are interest rates going to decrease soon?

avatar of @resiliencia
2 min read

I am wondering what is going to be the evolution of interest rates in the coming months and years. If I have to bet the interest rates are going to remain high for some years, specially as the governments fail to control inflation. In fact, inflation was caused by their own policies, and I see very little from their part to move in the right direction.

Here you have a chart from wikipedia where you can see the evoution of the Federal funds Rate compared to Treasury Bonds and & CPI "Inflation". Remember that CPI is not inflation, it's just an arbitrary metric that governments use to give a lower number.

I am surprised that a 30 year fixed rate mortgage in the United States is above 7% right now. I managed to get mine at less than 3% so I assume for now it's a good decision. I also checked the current % rates of my country and they are already above 3,20%. So far so good. Here the chart with the evolution:

I would like to add that DylanLeclair has made an indicator in Tradingview of the implied path of Fed Funds as currently priced by the futures market. However I checked it right now and it appears a message saying:

Script not availableWe hid this script because it violates one or more of our House Rules.Head back, or move along to the homepage to find a new way forward.

He published an image in X, so here you have it:

According to the futures, the projected fed funds rate will flatten at this levels during 2024 and by the end of the year will start going down. That's close of what I was assuming, but I don't think it will go to lower levels that fast. I expect that it will take longer.

What do you think about it? Enjoy Hivefest!

Posted Using LeoFinance Alpha