Mortgage Blog

It is the same as to predict whether Fed will increase the interest rate 
in Dec. When my clients asked me the question, my answer always as"it depends".

It depends on the employment data, depends on the global economy, and it depends on the inflation data, etc.

There are one interesting article I read over the weekend saying that the interest rate wil eventually go down to 3% or 2.875% level. It did not say which year, but I guess it might be 2017 - 2019, if it happens. 

And also it argued that the Fed will have to increase the interest rate a little bit in the next a few quarters. The main reason is that the decrease of the interest rate is the weapon to fight recession. And if the interest rate is near $0, then they could nt use this weapon any more. Then the only other option would be QE and the negative interests. According to the US Fed, they would try everything they can not to have negative rates.

So that means we will see the Fed increase the rate a few times, but the real interest rate will still stay at the current trading range.