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An Outlook on Current Rates

Current Rates

Nowadays, it is a fact that the market is its very volatile point. Among the volatilities that are present in the market, certain indicators are already pointing on a rate rebound as seen by experts. According to a forecast on financial market from RBC, short term interest rates such as those with variable rates are likely to go up the following year.

 

Based from the same report, it is also part of the prediction that in 5-year time, the bond yields will be going up as 2015 ends. In an interesting point, it is projected that increase rate will likely be higher for these bonds as compared to lending rates overnight.

 

Just right after the announcement of Bank of Canada for their interest rates, economists’ forecasts of Toronto Dominion bank mentioned that a hike on short-term interest rates will not happen until the following year’s 3rd quarter.

 

Regardless of whatever economists may think, the bond yield for 5 years for the previous years are consistently above the 1.5% mark. This is a clear indication that the rates will not likely to drop in the recent future, which makes it easier to predict that rates will be stable in its position.

 

There are also other indications that the rates will not be dropping like the following:

  1. The discounts on variable rates are currently in its historical lows.
  2. The fixed rates in short-term has dropped.

 

These are all indications that the fixed rate hike may happen in mid-2015.

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