1 Trillion dollars worth of ARMS reseting in 2007. How can anyone not see what is going on.....As housing prices fall where will consumers borrow money from, they have been using there house as a bank for the last 5 years, this is what has been keeping the economy rolling. "Industry forecasters recently estimated that more than $200 billion worth of adjustable rate mortgages will "reset" at higher rates in 2006 and more than $1 trillion will reset in 2007, the release stated."
One would argue that with this degree of malaise, there is little to any way that rates can rise to any significant extent without imploding the housing market, which is already imploding on its own. With that said, do you expect significant hikes in short term interest rates? Despite 'inflationary' pressures?