Why Interest Rates Wont Go Back Up Any Time Soon

In 1991, whether or not interest rates would “go back up” was a hot topic in economic and investing circles. In June of that year, Ron went to his M.I.T. reunion. He spent half an hour debating interest rates with an old classmate who has a Ph.D. in economics and is the chief economist at a major investment firm. His classmate was certain that interest rates were going to “go back up” because of the federal budget deficit. Ron wrote this essay to explain why the shift in the public from “Trade up on the equity” to “Prepay the mortgage” would drive rates down.

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