What Is The Interest Rate Prediction in 2010?

With the global recession easing off in the last quarter 2009, nations Central Banks are looking at adjusting interest rates.

America's Federal Reserve Chairman have hinted that interest rates may need to be adjusted upwards soon to help recovery. Many other countries' Central Banks, including America, have held onto interest rates for the Q1 2010.

For the first time in 5 months, China's Central Bank have adjusted interest rates upwards, by 0.04%, from 1.328% to 1.3684%. The increase is to cool the supercharged economy and control inflation.

With recovering economy, like in year 2004 and 2005, interest rates are destined to head north. In year 2004, interest rates for home loans were as low as 0.5% but by late 2005, it reach 4.0%. Will this pattern occur again in 2010?

A quick look at SIBOR Rates may give us an idea how SIBOR rates will move this year.

Months : Jan 10 - July 09 - Jan 09 - July 08 - Jan 08

3mths : 0.6833% - 0.6867% - 0.9680% - 1.1870% - 2.3750%

12mths : 0.9192% - 0.9242% - 1.2390% - 1.8750% - 2.6250%

Two years ago, in January 2008, it was the meltdown of the US Sub Prime, which lead to the start of recession. SIBOR rates starts to tumble rapidly for the whole year. In the last one year, since February 2009 till January 2010, interest rates stablized with little variation.

Chances of SIBOR going up in 2010 is high. Plan your finances carefully. If you are servicing high monthly mortgage, involving cash, becareful. Chances are, you will be paying more in the coming months.