Breaking Out The Crystal Ball For Interest Rates Under Trump’s Watch
Will interest rates continue to go up or is this just and unexpected reaction to Donald winning the election?
No crystal ball needed when reporting that mortgage rates have been on an upward trend for the past few weeks. But the crystal ball shows that we can expect to see a tiny continual gradual increase with some tiny gradual decreases in between over the next quarter.
Here’s the deal. The 30 year fixed mortgage interest rates had been as low as 2.75%, and recently they have been about 3.5%, and yes, they now are hovering just over 4%, but my crystal ball says they won't continue to rise. In fact, my crystal ball says rates might even drop again. My crystal ball says, for the time being, we can expect about 4% for the next several months to be the new norm. My crystal also suggests we can expect a tiny bit of fluctuation one way or the other for every economic news item published.
Overall there is no real economic change on the horizon. Trump will try hard, but I don’t see him being able to get any of his proposed economic changes through Congress. More Importantly, the debt ceiling suspension expires in March. Although my crystal ball suggests, they will borrow "extra" before the expiration. And in April, income tax money comes in, and “that” should carry the Federal Government through for several more months. With that said, eventually Congress will have to have that debt ceiling discussion again, and the already approved spending budget and tax revenue don't wash, so the congressional "discussion" should point to lower interest rates until Congress can decide what to do with the debt ceiling.
As always, looking into my crystal isn’t foolproof. So breaking out the crystal ball for interest rates under Trump’s watch isn’t foolproof. But if I was betting what the next several months look like, I think we can expect to see much of the same for right now. Rates should hover around 4 to 4.5% for the next several months.
If “for some reason” your crystal ball is saying something different, please feel free to add to this post. I am sure hearing different crystal ball readings should be helpful. It is always fun hearing about all the different crystal ball readings.