Signs that interest rates will rise

Yield curve

Steepening of the yield curve.

Inflation forecasts.

Thanks guys. Which yield curves in particular? 5 year? 10 year?

Also, are there any economic indicators that count like UE etc?

The yield CURVE includes SEVERAL interest rates. You can't have a "5 year yield curve"... That's why it'is a CURVE and not a single point...

Ah yeah. Of course. My bad. I was thinking about bonds for some retarded reason.

Thanks for clearing that up Mrvau.

I guess I really should be asking what drives the trend behind the yield curves? Anyone care to explain this for me? Obviously they have been forecasted but what is the justification in determining whether it slopes positively or negatively?

Thanks guys.

Check out the EuroDollar contracts which are futures on 3mth interest rates, traded at CME. They have high liquidty traded 23h a day, gives you immediate feeling of where/how the i% are going. these are also what the calculation of "there are xxx% chance of a 25bp hike in yyyy" sort of comments.

Yield curve - upward sloping, rate of change - in particular, I look for LIBOR to move in the upward direction.

Piece from the journal today:

"For starters, the Fed isn't expected to begin tightening monetary policy as it has in the past by raising the federal-funds rate. Instead it is likely to start by reversing its so-called quantitative easing, which was largely accomplished by pumping cash into the mortgage-backed securities market, where it bought roughly 70% of new securities last year.

Nick Kalivas, vice president of financial research at MF Global, argues the Fed isn't likely to address raising rates until it can gauge the success of its exit strategy from the mortgage market. As a result, investors should take their cues from that, rather than waiting for a language change, he says. The reason is that the end of the mortgage-buying program, slated for March 31, holds the potential to lead to higher mortgage rates."

good points by bond arb. spot 10 yr rates are around 3.70 today, 1y year forward, they're 4.25%. so even if rates rise, you need them to rise more than the forwards to win.

I think long 1y1y is a winner.

I feel like all the above responses are begging the question.... so we expect interest rates to rise because the market says interest rates are going to rise (according to the yield curve, and other metrics). And the market says interests rates are going to rise only because people expect interest rates are going to rise. Are there any fundamentals outside of market-based metrics that one might rely on (i.e. foreign central banks raising interest rates, exiting stimulus programs)?

of course, interest rates are driven by macro fundamentals to a very large degree. for example look at this white paper from ny fed economist. it basically uses large amounts of macroeconomics data to structure a model that gives better predictions than random walk

http://papers.ssrn.com/sol3/papers.cfm?abstract_id=676909

"Are there any fundamentals outside of market-based metrics that one might rely on (i.e. foreign central banks raising interest rates, exiting stimulus programs)?"

have you seen how much money the treasury is printing?

Thanks for the responses guys! Incredibly helpful!

You can still get a good interest rate if your credit report is good. Even if they rise, you will qualify for a good rate if your credit report is good. This is all I think about all day since I work for www.icreditinc.com I spend all day with people who need a better rate on something!

irrelevant to this thread.

You can still get a good interest rate if your credit report is good. Even if they rise, you will qualify for a good rate if your credit report is good. This is all I think about all day since I work for www.icreditinc.com I spend all day with people who need a better rate on something!]

ROFL...troll?

Hahahahaha has to be. I hate trolls, but hat off to you sir.