1 2022 interest rate update

January 2022 | Interest Rate Update

January 6, 2022

As of December, the Fed has recently changed its tone on inflation to take a hawkish position. They recently announced that their bond buying program will end in March and they are projecting to raise rates 3 times in 2022. The U.S. Prime rate has been at 3.25% since March 15th, 2020, when it was lowered due to the onset of the coronavirus pandemic.

According to a recent outlook statement published by City National Bank, “The pace of economic growth in 2022 will depend on additional variants of COVID and the pace of resolving supply bottlenecks. That said, growth should be robust due to the massive monetary stimulus, unprecedented surge in consumer wealth (third chart), more reopening of the economy, supply chain problems easing, inventory rebuilding, and strong corporate profits.

The benchmark 10-year treasury closed today at 1.73%. This is still low from a historical standpoint. The current market for fixed-rate loans looks like the following:

  • 3-year fixed from 2.50-3.50%
  • 5-year fixed from 2.75-3.75%
  • 10-year fixed from 2.90-4.0%
  • 15-year fixed from 3.15-4.25%
  • 20-year fixed from 3.25-4.50%