Will interest rates go up considerably in 2009?

All the Fed can do to help the market is lowering the rate now. The recovery hasn’t even start yet, the interest rates will sit just like that (1% or lower) through out the year of 2009. You can realize it from the worsen economic data, especially the job market and housing stats.

Ben S. Bernanke said the recession is unlikely in the middle of 2008. Now it’s worst recession in decades. The Fed’s credibility is so questionable. Fed try to keep up people’s confidence for the economy with LIES. Now all the fears, panic, anxiety around flowing around the market, which makes the situation worse, the U.S debt is another issue for people to worry about. Hiking rate is just a idea is far too early care about.

Even Until the current financial turmoil has been brought under control and the economy is in a recovery stage, I expect interest rates to remain low. Why? The Federal Reserve will keep those rate that it controls low (the Fed Funds Rate and the Discount Rate). The Fed will also make sure ample funds are pumped into the economy. Finally, consumer demand will likely continue to decline for awhile as consumers try to put their financial affairs in order. This will cause less demand for money. Less demand for money + a higher supply of money = flat or lower rates.

Hiking interest rate may happen in the end of 2009 or early of 2010

Once the economy has turned around and things are definitely on an upward trend (including consumer confidence), inflation will become more of a factor in determining the level of rates. With all the money being pumped into the system, inflation is likely to rise over the longer term and with inflation rising, interest rates will ultimately rise. Also, the Fed will change it’s focus from economic stability to fighting inflation.

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