Sunday Morning Rate Roundup: After a Pause, What’s Next for Interest Rates?

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Good morning, and happy Father’s Day. Today we’re kicking off a new weekly feature: a Sunday Morning Interest Rate Roundup. We again seek your feedback on this: tell us about fed-watchers we should be including here (e-mail: lalandblog@yahoo.com).

OK, here goes: Freddie Mac reports the average rate on 30-year fixed mortgages was 6.74% on June 14. What’s next for rates? Rates leveled off late in the week after a spike, and several commentators see a holding pattern. Inman.com’s Lou Barnes writes, ‘I think there are excellent reasons for faith in stability near here, low-fee mortgages about 6.75%.’

The L.A.Times’ Tom Petruno also gives a nod in this direction: ‘Many Wall Street analysts believe that long-term interest rates in the U.S. aren’t likely to continue the sharp upward move of the last few months.’ But he warns of two risks to that forecast: a real pickup in inflation, or foreign investors souring on U.S. bonds.

Bloomberg’s Caroline Baum snuffs out any hope of a rate cut this year: ‘Interest-rate futures markets erased the last vestige of hope that the Fed would cut its benchmark interest rate this year.’

Bankrate.com’s Greg McBride, who blogs about the Fed, disagrees: ‘I have believed, and will continue to believe until economic data convinces me otherwise, that the next rate move by the Fed -- whenever that might be -- will be to cut rates, if only subtly to assure continued economic growth. The rise in bond yields, to me, doesn’t indicate the Fed is any more likely to raise rates.’

Thoughts? Comments?

Photo Credit: Reuters