Global| Dec 06 2010U.S. Interest Rates Begin To Nudge Higher
by:Tom Moeller
|in:Economy in Brief
Summary
Tentative indications of improvement in U.S. economic activity began recently to lift interest rates. Short-term rates have risen slightly as investors' fear near-term action by the Federal Reserve. Amongst the economic indications [...]
Tentative indications of improvement in U.S. economic activity began recently to lift interest rates. Short-term rates have risen slightly as investors' fear near-term action by the Federal Reserve. Amongst the economic indications are lower initial claims for jobless insurance, higher vehicle and home sales as well as improved ISM readings on factory and service sector activity. Last week's report of weakness in nonfarm payrolls is expected to improve with this month's figures. Investor fears generally are not shared, however, by economists. Through year-end 2011 the National Association for Business Economics (NABE) survey has left short-term rates unchanged from current levels.
The prospect of the Fed keeping short-term rates low, along with economic improvement, has lifted long-term rates. Investors fear the ultimate inflationary consequences and the need for greater Fed tightening, later. Economists generally share this concern and see the 10-Yr. Treasury rate at 3.25% in twelve months. In a recent television interview, Fed Chairman Ben S. Bernanke downplayed these inflationary fears. Mortgage rates rates also have moved up modestly to date. The rate on 15-year fixed rate mortgages has inched up to 3.81% from its low one month ago of 3.57%. As might be expected rates on adjustable rate mortgages have not risen from the 3.25% low.
Interest rate data are available in Haver's USECON, WEEKLY and DAILY databases. The NABE figures can be found in the SURVEYS database.
| U.S. Interest Rates | Latest | Nov. | Oct. | Dec. '09 | 2009 | 2008 | 2007 |
|---|---|---|---|---|---|---|---|
| Fed Funds | 0.20 | 0.19 | 0.19 | 0.12 | 0.16 | 1.93 | 5.02 |
| 1 Month Treasury | 0.16 | 0.13 | 0.14 | 0.03 | 0.10 | 1.29 | 4.40 |
| 1 Year Treasury | 0.29 | 0.25 | 0.23 | 0.37 | 0.47 | 1.82 | 4.52 |
| 5 Year Treasury | 1.68 | 1.35 | 1.18 | 2.34 | 2.19 | 2.80 | 4.43 |
| 10 Year Treasury | 3.01 | 2.76 | 2.54 | 3.59 | 3.26 | 3.67 | 4.63 |
| Corporate Bond Aaa | 4.95 | 4.87 | 4.68 | 5.26 | 5.31 | 5.64 | 5.56 |
| 15-Year Fixed Rate Mortgage (FHLMC) | 3.81 | 3.68 | 3.68 | 4.35 | 4.58 | 5.63 | 6.03 |
| One-Year ARM | 3.25 | 3.25 | 3.38 | 4.30 | 4.71 | 5.18 | 5.56 |
Tom Moeller
AuthorMore in Author Profile »Prior to joining Haver Analytics in 2000, Mr. Moeller worked as the Economist at Chancellor Capital Management from 1985 to 1999. There, he developed comprehensive economic forecasts and interpreted economic data for equity and fixed income portfolio managers. Also at Chancellor, Mr. Moeller worked as an equity analyst and was responsible for researching and rating companies in the economically sensitive automobile and housing industries for investment in Chancellor’s equity portfolio. Prior to joining Chancellor, Mr. Moeller was an Economist at Citibank from 1979 to 1984. He also analyzed pricing behavior in the metals industry for the Council on Wage and Price Stability in Washington, D.C. In 1999, Mr. Moeller received the award for most accurate forecast from the Forecasters' Club of New York. From 1990 to 1992 he was President of the New York Association for Business Economists. Mr. Moeller earned an M.B.A. in Finance from Fordham University, where he graduated in 1987. He holds a Bachelor of Arts in Economics from George Washington University.
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