Current Interest Rate information

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patrick013
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Current Interest Rate information

Post by patrick013 » Mon Apr 09, 2018 4:51 pm

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Many people don't rely very much on forecasts but here is the
current Congressional Budget Office's outlook and forecast.
Could be a buyer's market for treasury bonds in the 2020's
barring an economic collapse of some kind.

Here's the full report.
April 2018 CBO report
Last edited by patrick013 on Mon Apr 16, 2018 2:59 pm, edited 1 time in total.
age in bonds, buy-and-hold, 10 year business cycle

VaR
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Re: Current Interest Rate information

Post by VaR » Mon Apr 09, 2018 6:50 pm

What were the CBO forecasts in prior years and how did they work out?

I found the 2012 version of the report online. As an example, it projects the following:

Code: Select all

                           Interest Rates (Percent)
                           2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
Three-month Treasury bills  0.1  0.1  0.1  0.4  1.6  2.6  3.2  3.6  3.8  3.8  3.8  3.8
Ten-year Treasury notes     2.8  2.3  2.5  2.9  3.5  4.1  4.6  4.8  5.0  5.0  5.0  5.0

dash1s
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Re: Current Interest Rate information

Post by dash1s » Mon Apr 09, 2018 7:21 pm

^Whoops!

lack_ey
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Re: Current Interest Rate information

Post by lack_ey » Mon Apr 09, 2018 7:40 pm

I think government sources also including the Fed itself have been a bit too optimistic (anticipating stronger economy, higher rates) historically compared with others like unaffiliated economists or market measures, and even market measures have a pretty bad track record and have been anticipating higher rates than has happened for years now.

There are a lot of opinions on where short rates should head in the long term; certainly if it's well above 3%, like 3.7-3.8% or so, that implies that duration risk is toxic as Treasury bonds 5 yr-30yr at 2.60%-3.02% sounds like a terrible idea in that universe. I'm not too convinced about that, but it's hard to say.

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patrick013
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Re: Current Interest Rate information

Post by patrick013 » Tue Apr 10, 2018 1:31 pm

VaR wrote:
Mon Apr 09, 2018 6:50 pm
What were the CBO forecasts in prior years and how did they work out?

I found the 2012 version of the report online. As an example, it projects the following:

Code: Select all

                           Interest Rates (Percent)
                           2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
Three-month Treasury bills  0.1  0.1  0.1  0.4  1.6  2.6  3.2  3.6  3.8  3.8  3.8  3.8
Ten-year Treasury notes     2.8  2.3  2.5  2.9  3.5  4.1  4.6  4.8  5.0  5.0  5.0  5.0
Right now they're a couple of years behind, always were.
age in bonds, buy-and-hold, 10 year business cycle

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willthrill81
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Re: Current Interest Rate information

Post by willthrill81 » Tue Apr 10, 2018 2:10 pm

I'm sure that millions of people were sure that when Japanese 10 year bond yields hit .5% back in 2003 that they 'had nowhere to go but up'. And yet, they're currently .036%.

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I don't think it's prudent to try to speculate on future bond yields.
“It's a dangerous business, Frodo, going out your door. You step onto the road, and if you don't keep your feet, there's no knowing where you might be swept off to.” J.R.R. Tolkien,The Lord of the Rings

VaR
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Re: Current Interest Rate information

Post by VaR » Wed Apr 11, 2018 2:42 am

Truly predicting future bond yields is like predicting future equity prices. If you were reliably 51% accurate you would be a billionaire.

oldguy
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Re: Current Interest Rate information

Post by oldguy » Mon Apr 16, 2018 2:34 pm

@Patrick - thanks for posting. I will looking to buy annuities sometime in the next 4 years. I may guess at the end of 2019 being a good time.

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