Some analysts are saying around 4% cash rate and that would give about 6% mortgage rate wouldnt it.Much will depend on if and how any credit reforms are instigated and just when the liquidity moves back into the system.
With Libor rates plummeting this may be sooner than we think.But this could just be volatility in this part of the financial arena.It may well jump again on any more large banks going under.
If the banking system survives and we see liquidity move back in we then have to watch for the Feds and Reserves moving back to an inflation bias.
Inflation shouldnt be a problem whilst growth rates are low.
