Interest rates
- Gerald Mullaney
- Jul 5
- 1 min read
Why are long term rates being adjusted
Gerald Patrick Mullaney Jnr
5 July 2027
There are a few asumption as to why rates have been adjusted down.
Only short term rates are being required from the one to two year rates as these are the cheapest but risks are high as the rates being adjusted up all of a sudden.
The four and five rates are being adjusted down marginally to has to encourage borrowers to fix long term.
The banks are excepting lower margins for the time being.
It could also be a sign that rates go lower, however the four and five year swaps rates do not indicate lower rates therefore the banks are accepting lower margins for possible a short time.
One does need to remind on self of risk management, how will one deal with risk? how will one deal with instability? How will one deal with un certainity? What price does one put on stability?
Cheap is not always cheap.
Currently as at today rate five years is 5.49% that is a great rate when one considers the average long term rate of 7%
Stability in an uncertain world is worth thinking about.
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