At a client event in Short Hills, NJ, Jim Vogel, Executive Vice President of Capital Markets for FTN Financial, laid out an expected timeline for anticipated interest rate increases over the next few years. Vogel believes interest rate increases may be more moderate and more spread out than the market anticipates. Vogel believes that the Fed Funds rate will increase slowly throughout 2010, then at an increasing pace in 2011, ending 2011 at approximately 2.0% versus 0.75% today. As a result, 10-year Treasury rates should not increase at a severe and quick pace, but likely stay range bound between 3.65% and 4.80% in 2010 and 2011. “If Jim is correct, this will provide a good window for borrowers to refinance their properties without being concerned that the market will move away from them during the underwriting period,” Michael Sneden, Executive Vice President of ValueXpress said.
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