jdharward

Interest rates to rise and top out a year from now?

TVC:US10Y   US Government Bonds 10 YR Yield
Looking at the 10yr treasury as a gauge for the overall rate environment and the revised GDP data, I'm predicting the US will see rates rise for roughly the next year before coming to a peak around 3.75% on the 10yr before beginning a new wave lower, just in time for the coming recession in the summer of 2019.

Expect to see 30 year fixed US Mortgage rates above 5% for 2019 with a peak level of 5.5% to 6%.

Central bank action could delay peak yields to the summer of 2020, ahead of US Presidential election. History predicts a recession occurring within 18 months (or less) of short + long term yields inverting. I expect we'll see this inversion of the yield curve occur in December 2018, following what will be the Fed's 4th rate hike of the year.

This next recession will be a real doozy, likely putting 2008 to shame with the Fed likely responding with (what else?) QE on steroids, sending rates down to (or below) the lows witnessed in June 2016 following "Brexit".


Comment: So far, the chart is playing out spot on.

11-20-18 - 10yr has been falling with stock market losses. Look for 3.0 to act as support.

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