Will rates come down again in next 5 years?

wow, i notice 10 year fixed mortgage at 4.6%. i fixed the same deal last March at 2.85%.
people need to fix asap.
 
skrooge said:
the ECB says it's neutral rate is going to be 2% you would expect markets to price this in so it would be very hard to see swap rates ever being below 2% add in a bank margin and you could easily get to 4-6% range. Th
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I think we have the lowest jobless rates ever in the eurozone now. One of the big drivers of inflation is the inability to fill jobs and that is what is really driving inflation.
Therefore the real aim of the ecb and fed is to get unemployment rates up in order to fill all those vacancies and curb the rise in wage demands and costs. They have made no secret of this.
So they are actually more concerned with unemployment and job vacancies than the inflation rate. If they see job vacancies rates falling and unemployment rising that's when they will ease off on interest rate rises. They want to reverse: "The Great Resignation "
 
The main rate is 3% now, and will increase to 3.5% in March 2023.

Will there be further increases?

This is what Ms. Lagarde said yesterday:

Monetary policy statement (with Q&A)

The European Central Bank (ECB) is the central bank of the 19 European Union countries which have adopted the euro. Our main task is to maintain price stability in the euro area and so preserve the purchasing power of the single currency.
www.ecb.europa.eu

(My emphases)

The Governing Council will stay the course in raising interest rates significantly at a steady pace and in keeping them at levels that are sufficiently restrictive to ensure a timely return of inflation to our two per cent medium-term target. Accordingly, the Governing Council today decided to raise the three key ECB interest rates by 50 basis points and we expect to raise them further. In view of the underlying inflation pressures, we intend to raise interest rates by another 50 basis points at our next monetary policy meeting in March and we will then evaluate the subsequent path of our monetary policy. Keeping interest rates at restrictive levels will over time reduce inflation by dampening demand and will also guard against the risk of a persistent upward shift in inflation expectations. In any event, our future policy rate decisions will continue to be data-dependent and follow a meeting-by-meeting approach.
 
ECB press conference, my emphases added.

I was wondering if you could tell us a little bit about the flavour of the debate that preceded today’s decision to raise interest rates by 50 basis points in March? I’m interested in knowing whether there were any calls to commit for longer, potentially flag a less aggressive stance, or say nothing at all, given that you also say that your decisions are data-dependent. That would be my first question.

The second one, I’m interested, when you say the subsequent policy path will be decided in March, are we just talking about the pace of rate increases, or could one potential conclusion also be that you have already reached the peak in interest rates at that time?

Those are really good questions to try to explain our decision. I would just remind you that our decision is not the decision for March. We’re taking a decision as of now, which is to raise all three interest rates by 50 basis points. I would characterise our good discussions with an enlarged Governing Council, given that we are now 26 around the table, I would characterise them as marked by the sign of continuity and consistency. I know that I have repeated that in the course of the monetary policy statement, and I have said it before, but the expression, ‘We shall stay the course’, or ‘the Governing Council will stay the course’, is a good way to express that double principle of continuity and consistency. Continuity, because we were very clear in December that in all reasonable scenarios significant rate increases would be needed. Would be needed for what? To bring inflation back to the 2% medium-term objective that we have in a timely manner.

We also made it clear that this would require rates to rise to sufficiently restrictive levels, and that rate increases would happen at a steady pace. So we are making that decision in that continuity that I have tried to explain. Steady pace: we increased rates by 50 basis points in December, we increased rates by 50 basis points in early February, and we intend – which is a strong word; it’s not an absolute, irrevocable, unconditional commitment, but it’s a strong word – we intend to raise by 50 basis points, and that is what was meant in December by this steady pace reference that you find, yet again, in the monetary policy statement. So this has been the continuity. Where we have consistency is consistency with the communication that we had back in December, and with any communication that I have expressed ever since, and it’s totally consistent with the view that we reached in a very, very large consensus today, that it should be 50 this time around, it is intended to be 50 in March.

Now, you will say, ‘Well, yes, but what about after March? Does that mean that you have reached the pinnacle or the peak?’ No. We know that we have ground to cover. We know that we are not done. What we are saying is that, as we will receive projections, we will need to assess what rates, what level, at what pace, are needed in order to do the two things which are embedded in my expression, ‘stay the course.’ The first one is to raise significantly into restrictive levels and stay there for sufficiently long so that we are confident that at those rates we will actually deliver the 2% objective medium-term that we have set for ourselves, and which is delivering on our mandate. Those were the themes that we debated. I have to tell you that there was general agreement on the fact that the 50 basis points this time around and the 50 basis points in March were legitimate on the basis of, particularly in March, of the underlying inflation pressure that we know will continue. Where there was discussion and not full agreement was on the way in which we communicate it. But on the overall monetary policy statement that reflects our discussions and our decision, there was a very, very large consensus. So I hope I have addressed your two important questions."


Based on the highlighted text, I can't see 3.5% in March being the peak.
 
Another question at the press conference:

Investors and the financial markets expect that the ECB will finish raising interest rates in coming April, for example, by their meetings in May. So, as you mentioned, I know well, so it depends on the coming data, but do you think such expectations are correct or wrong?

I’ll go back to what we intend to do, or what we actually shall do, not intend to do. We shall return inflation to 2% in the medium-term, in a timely manner, and we know that to do that we need to move into restrictive territory, into restrictive levels. We know that rates are the best tool in order to do so, so we will use interest rate hikes in order to get to those levels. As I said, we are certainly not there now, nor will we be in March, given that we will rely on underlying inflation indicators and pressure that we see very, very clearly nowadays. What will happen next, as I said earlier on, is going to be a factor of how much more ground we need to cover, and there will be ground to cover most likely, but it will be data-dependent. We will look at all components, and it will depend on the interest rates, where we are then, and where we believe we need to be in order to deliver on our commitment, but that will not be enough. We will have to stay there.

So it’s moving into restrictive territory, because we know that’s needed, given the elements that we have, but it’s staying there so that we are confident that we don’t touch the 2% for a few weeks, a few months, but that we have confidence that we will stay at target. I hope that satisfies your question.
 

I think this is a critical point. Also the path of fiscal actions are once again in conflict with ECB monetary policy.
 
I think people here and in general give lagarde too much credit, in the same way the ecb and the fed created this inflation and denied responsibility I think they will hike rates blindly into the future not really knowing the consequences. these people are not compotent and placing trust in their abilities is misguided.
 
How much is the 0.85% costing you over the 4 years?
 
Harvard said:
How much is the 0.85% costing you over the 4 years?
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I havent really worked it out Harvard.
Have about 23 years left on mortgage. Have young family.
Probably will break even, but its the peace of mind i want.
 
i notice Havens 10 year rate is now 4.6%.
11 months ago, i got the 10 year rate for 2.85%.
have i missed something, have has mortgages jumped this much in a short space of time?
 
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