Interest Rates Predictions

[41:24] in the end, the Fed's going to be forced into some type of yield curve control just like the Bank of Japan where the you can have you can force the banks to buy more treasuries, but the Fed's going to have to come in and buy more treasuries some point in the next year and a half, two years.

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[8:56] Trump may even lower interest rates before the midterm election, which of course will bring down the dollar and bring gold prices up. He's going to do everything he can to pump this up.

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[18:00] I think we get at least one, maybe two before the year's over. Uh, I think that they're warranted. I think that they're due.

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[5:29] interest rates really if you would just let them trade freely David and let the free market determine what they are the 10ear notes are now just under 5% they were almost at 5% I think they're going to end up near near 6% by the end of the year

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[37:58] But, but my answer to the question is, they're going higher because from the early 1980s, they were in a long-term bear market. They went from, say, 15% to negative numbers, which, frankly, I thought was metaphysically impossible to have negative interest rates, but it happened because that's that's all controlled and distorted in the economy we're living in today. Well, since 2022, they've been going up. I think they're going to go up much higher because the Federal Reserve is forced at this time to buy most or a lot of, anyway, the US government's debt.

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[1:19] I think in the very near term that US policy makers are prepared to allow the market to set the tone of US interest rates and that suggests to me that interest rates will go higher in the US.

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[35:10] My view is that the interest cycle peaked out in '81. Interest rates dropped until August 2020. And since August 2020, we are in a upward cycle for inflation and interest rates... the trend is upwards. That is my view.

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[36:52] For next 6 months, I think it's going to go down.

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[17:46] I'm betting that he's going to hike. I'll take the under. Okay. I I I honestly think, you know, you got to understand he owes his whole gig to the guy that torched the last guy that was disloyal. Okay. Um and I I I just want to see whether his resolve will last after Trump's first tweet complaining about interest rates, which I guarantee you will happen before the midterms. There's no way this administration is going to go into the midterms wanting the rates elevated and they will sacrifice um inflation to um to get to get their way. So I I I I just I don't think that Kevin Worsh despite all of his hawkish narrative is going to withstand.

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[18:38] He wants lower rates. He wants 1% rates. He may not get 1%, but he's I think he's gonna get much lower than wherever it is three and a half percent right now uh on on the Fed funds rate.

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[13:36] Trump is not going going to allow uh him to start raising rates in any meaningful or long-lasting way. Uh he might get away with one rate cut, uh but he's not going to keep raising rates.

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[14:28] the interest rates actually have to be below the rate of inflation. Going forward, we have to have negative real rates or the whole house of cards falls apart. And it that's just simple math at this point.

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[16:50] Kevin refused to cut interest rates. He's not cutting interest rates, right? ... Well, the mar the bond market tells you where interest rates are headed, right? And what is that? What are what are interest rates doing? They're going up, folks. They're going up. So, how can the Fed cut interest rates? They only can cut short-term rates anyway. He's going to look like an idiot if he cuts interest rates.

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[17:01] I don't think the Fed is going to raise rates. I I I especially with walsh um coming in the new Fed chairman um I think it would be I think it would be a huge surprise if his first move as Fed chairman was to raise rates. I what it does mean though is they're probably much less likely to lower rates in the near term.

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Right now, the market thinks we're going to get rate hikes both in Canada and the US. He doesn't. the market is betting that inflation can go higher. We've had many guests say the same. He thinks we're in for a disinflationary environment.

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[24:36] America cannot lower interest rates anytime soon. They probably will have to actually raise it because inflation inflation is going up.

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[29:23] I do think that eventually the economy is going to slow down and that will bring in rates... I do think that shorter term the economy or the stock market coming in could bring yields back in a little bit.

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[4:14] rates are going to start to rise, which is what we talked about a long time ago is that rates are going up. They're not going down.

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[3:12] we're now at the process of going back to normality uh which is interest rates that settle into something closer to the average of the last 40 years and stocks having to be repriced against that more typical interest rate.

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[0:29:37] the debt market is going to is losing its value and rates should be expected to go higher for longer, more consistently. And we've called for six major western nations do 6% as part of our October last year predictions for 2026.

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[2:41] The base case to me is uh that we're probably going to see further cuts uh into uh uh into the interest rate uh environment not only the short end but also the long end eventually because the system cannot survive if we see this

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[3:18] I think that that it's on the cards uh for the next 12 to 24 months. And if you think that way uh there's going to be a lot of changes in in how uh a lot of assets that tend to benefit from the suppression of rates uh will will will work through the system.

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[12:00] I'm not saying we're going to go to 10% bond yields over the next year. I'm just saying in general it the path for interest rates is higher not lower.

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[27:26] I believe there's a more likely chance of a raise rate than a decline... interest rates to me can only work higher over time. They're not going back to one two or 3%.

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[4:01] Interest rates are going to start to go up. And if we start printing money to pay for all of the interest costs and because we can't finance it, that again is just going to put more inflationary pressure.

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[18:57] So either scenario, higher rates then. Yes. And then unpack the implications of that.

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[16:49] I'm looking forward to uh May when Kevin Worsh steps in. That that's going to be driver. He's going to push rates lower.

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[29:01] Interest rates are going to run up. Job boning by Worsh or anybody else isn't going to work.

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[1:39] I think that there will be a major break in something far before next year. So for example, let's say the the stock market and the financial system uh breaks heavy down, let's say in September. Well, I mean they're going to respond with interest rate cuts. So I don't think the system will stay afloat up until mid next year. And I think we're I think it'll be this this year if something breaks, we'll have interest rate cuts.

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[36:10] Worsh gets in and yeah he does interest rates probably by the fourth quarter

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[21:08] my prediction, and I hesitate to predict the d direction of interest rates, uh, but I think in the coming years, we're going to see interest rates go back to the levels they were in the early 80s and beyond

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[26:25] we are expecting a interest rate hike and to have that hike at the next Fed meeting.

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[9:26] Well then interest rates are still going to remain high.

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[12:58] I think that there is a a very important macro trade, if you will, that is emerging here, that could be quite significant, which is basically betting that rates are going to go substantially lower.

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[7:51] And that means that rate cuts will occur um later this year even though the market is not pricing them in at that this point.

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[9:42] I've got interest rates actually going up quite a bit

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[18:57] I think it's going to be very very hard for rates to go up from here. And so I think rates are going to be capped at this four or 5% max level for a long time and likely be suppressed lower

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[0:04] rates are still going to come down this year

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[22:16] if you have me estimate our interest rates going to go structurally up over the next say 10 years I would say probably not. Uh my base case would be choppy sideways for quite a while.

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[20:15] no matter what the Fed does in the short run, long-term interest rates are headed up back to the levels that they were in the early 1980s, which most people have forgotten, even the US government was paying 15, 16, 17% for for to sell tea bills. U back in the early 1980s, uh we're headed back there just because of the debasement of the currency.

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[3:57] Euro zone the in the uh the basic prediction is that rates will be uh or on an incline now. uh there's more likely to be tightening in the Euro zone.

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[3:46] I do think personally we will get a December rate cut.

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[0:04] Interest rates will be zero by June of next year.

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[24:47] the markets are expecting a 3% funds rate by next spring, early summer. That's kind of the equilibrium rate that's already priced in.

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[5:17] we have bottomed in that cycle and we're expecting interest rates to go up over the next 5 10 15 years.

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[32:01] 2026, as you asked me the question, I think we're going to um you know, unavoidably lower rates in a big way.

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[47:07] Now the real interest rate actually has gone up to about 1.7% or something like that. And I I think I think it probably will go up to, you know, like two and a half or 3% something in that zone.

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