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The expert on mortgage rates strikes again: the analyst who correctly predicted rates of 8% announces a new goal

Social Security COLA
Social Security COLA; Source- Yahoo Finance

Keep reading to find out what might happen next with mortgage rates and Treasury prices.

Bruce Kamich, an expert for Real Money Pro, correctly predicted that mortgage rates would go up last year. He is now back in the news with new predictions. Kamich thought that 10-year Treasury yields would hit 5% in September 2022, which would cause mortgage rates to rise to 8.00%. Many people were shocked when both goals were met in October, which slowed down the home market.

Investors and borrowers are eagerly waiting for Kamich’s latest thoughts because he has a history of being right on the mark. This year, inflation has caused loan rates to be much higher than predicted, so Kamich’s forecasts are important. As long as there are economic risks, his predictions are a useful way to find your way through the rough financial landscape.

The Federal Reserve’s fight against price increases

The Federal Reserve is having a hard time with higher interest rates and inflation, which is a surprise for the U.S. economy. A rise in prices in 2022 was caused by policies from the Covid era and problems in the supply chain in late 2021. In March 2022, the Federal Reserve raised the Federal Funds Rate by 5.25% to fight inflation. This made the economy move more slowly. In the first half of 2023, GDP barely grew, and the CPI dropped from over 9% in June 2022 to 3.2% in October.

But worries are still there because the 10-year Treasury yield, which is used as a standard for loan rates, hit 5%. This caused the 30-year mortgage rate to rise to 8% in October, which was the highest level since 2000. The whole country is watching as the Federal Reserve tries to keep inflation in check while also boosting the economy.

Based on the charts, 10-year rates may do this again next

Bruce Kamich, a veteran market expert who is known for correctly predicting that interest rates would rise, looks at his research again and suggests that homebuyers might be able to relax. Using daily and weekly charts, Kamich figures out that the 10-year Treasury yield goal should be between 4.16% and 3.15% based on signs of a slowdown. If this happens, it could mean lower borrowing rates, which would give people who have been priced out of the home market hope. Kamich’s ideas are a hopeful note in an otherwise unsure economic situation.

The Federal Reserve may soon lower interest rates

Because interest rate trends aren’t clear, Wall Street is full of rumors about a coming change in Federal Reserve policy. Analysts at UBS think that inflation will go down and the economy will slow down. This could lead the Fed to change its mind about raising interest rates and instead consider cutting them. They think that the Federal Funds Rate will drop by a large amount, 2.75 percent, by the end of 2024 and then stay at 2.5 percent. The Bank of America agrees with this and says rates could go down as early as June 2024. If these predictions come true, a Fed that is less strict could push the 10-year Treasury yield toward its goal of 3.15%, which could be good for markets and investors. The fact that these changes are expected to happen adds an interesting twist to the story of economic growth.









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