Andrei Jikh: Interest rates will fall

Said on May 23, 2022, at 12:32 in the video.

What was said
Andrei Jikh

@andreijikh

“the bet that i made is that seven years from now rates will go back closer to zero or at least lower than what they are today”
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PredictionInterest rateswill fallChecked at fixed windows, from 30 days to 5 years
What happenedafter 1 year
Incorrect

Reading when said

1%

May 23, 2022

Reading at close

5.25%

May 23, 2023

Change

+4.25 pp

The policy rate was 1.00% at the start of the window and 5.25% on May 23, 2023, a net change of +4.25 pp. The largest cut inside the window was 0 basis points. The stated threshold was 25 basis points.

30 days

Incorrect

90 days

Incorrect

180 days

Incorrect

1 year

Incorrect

The window it was checked over

Interest ratesWindow checkedRecession (NBER)
−2%0%2%4%6%201920202021202120222023Said on May 23, 2022
−2%0%2%4%6%2019202020222023Said on May 23, 2022

Federal funds target range, upper limit: Federal Reserve Board via FRED, figures as first published. The shaded span is the window the call was checked over; grey bands are recessions.

Result at every window

All windows are shown, so none is picked
Result at every window
WindowResultAt the startAt the endChangeBenchmark
30 daysR-FED v4Incorrect1%1.75%Jun 22, 2022+0.75 pp—
90 daysR-FED v4Incorrect1%2.5%Aug 21, 2022+1.50 pp—
180 daysR-FED v4Incorrect1%4%Nov 19, 2022+3.00 pp—
1 yearR-FED v4Incorrect1%5.25%May 23, 2023+4.25 pp—
3 yearsR-FED v4Incorrect1%4.5%May 22, 2025+3.50 pp—
5 yearsR-FED v4Pending——May 22, 2027——
Why: 30 days

The policy rate was 1.00% at the start of the window and 1.75% on Jun 22, 2022, a net change of +0.75 pp. The largest cut inside the window was 0 basis points. The stated threshold was 25 basis points.

Why: 90 days

The policy rate was 1.00% at the start of the window and 2.50% on Aug 21, 2022, a net change of +1.50 pp. The largest cut inside the window was 0 basis points. The stated threshold was 25 basis points.

Why: 180 days

The policy rate was 1.00% at the start of the window and 4.00% on Nov 19, 2022, a net change of +3.00 pp. The largest cut inside the window was 0 basis points. The stated threshold was 25 basis points.

Why: 1 year

The policy rate was 1.00% at the start of the window and 5.25% on May 23, 2023, a net change of +4.25 pp. The largest cut inside the window was 0 basis points. The stated threshold was 25 basis points.

Why: 3 years

The policy rate was 1.00% at the start of the window and 4.50% on May 22, 2025, a net change of +3.50 pp. The largest cut inside the window was 0 basis points. The stated threshold was 25 basis points.

Why: 5 years

Not yet resolved. The window closes May 22, 2027.

What was said around it

interest rates to stimulate growth and our politicians love to use that mechanism of interest rates to win elections and you can see these cycles of boom and bust in politics all the time in fact if you look at our historic interest rates over the last few decades you can see for yourself that rates like to stay closer to zero that's because once again we love cheap money and i don't think that addiction is going to change any time soon but sure sometimes we will have to raise rates like we are right now to slow down inflation but the bet that i made is that seven years from now rates will go back closer to zero or at least lower than what they are today and i could be wrong and that's okay because that's why i took out a loan that i could afford even with the higher rates but if i was in the market to buy a house today then i would probably buy as long as i could afford it i would put down as the least amount of money possible up front even if it means paying the pmi temporarily as long as i could afford it because my bet is that rates will be lower in the future at which point i could refinance get the lower rate and if i'm still annoyed by the pmi i could pay the difference of 20

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