More Thoughts on Interest Rates

The Wall Street Journal article referenced in the preceding post (Thoughts on Interest Rates) was published on April 10, 2010: Two Treasury Forecasts: a Grand Canyon-Size Gap (subscription may be required to access). The WSJ asked 18 forecasting teams on Wall Street for their predictions of the 10-year U.S. Treasury rate at year-end. At the time of the article the rate was 3.93%.

The article was primarily about the widely differing forecasts of two of the most respected names on Wall Street: Morgan Stanley predicted an increase to 5.5% while Goldman Sachs predicted a decrease to 3.25%. Goldman Sachs was one of only four teams to predict a decrease. The median prediction was an increase to 4.2%. So far Goldman Sachs is looking pretty good. Today's rate for the 10-year Treasury is 2.98%.

A good source of historical interest rate data is FRED (Federal Reserve Economic Data) at the St. Louis Fed. FRED has lots of other economic data, too—over 20,000 time series, all of which can be graphed and downloaded for further analysis. Here's a graph from FRED of the 10-year Treasury rate since 1962: