What is Prime Rate going to be?
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What is the Prime Rate ?               
What is the Prime Rate?
The rate that banks charge to their best customers is
the prime rate. The real question is... What is the Prime
Rate for your business? Even very strong companies
will pay prime plus one percent or more unless they are
very large corporations. The particular industry your
business is in also affects the rate banks will offer.

Where has Prime Rate Been?
Check out the chart and graph below. You will see that
the Prime Rate has been as low as 4% and even as
high as 20%. Prime Rate can rise rapidly.  In fact, it just
took a few years for Prime Rate to rise from roughly 6%
in the mid-seventies to over 20% in 1980. Those were
tense times for those who lived through them.

What is actually of greater concern than current Prime
Rate is the direction of the Prime Rate.
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Accurate Results
SignalTrend's Interest Rate Forecast System was developed through years of research and thoroughly backtested over many
decades. The Forecasts generated in the backtest of SignalTrend's computerized forecast system are provided in the tables
below. The heart of this system is a versatile model that identifies the probable course of future interest rates. Numerous
analytical equations were crafted to provide objective, unemotional forecasts for four key interest rates. Its signals are designed
to produce a Prime Rate Forecast, Mortgage Rate Forecast, Treasury Rate Forecast and CD Rate Forecast. Take a few
minutes and review the tables below.
The average variance between actual and forecasted rates for the five year
period ending with 2006, was .38%, .40%, .58%, and .50% for Mortgage, Treasury, Prime and CD rates respectively.
10 Yr Treasury
30 Yr Mortgage
6 Month CD
Prime Rate
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7.6%
7.2%
4.1%
3.3%
3.5%
7.1%
5.2%
5.1%
6.1%
4.7%
6.3%
5.9%
1.8%
1.3%
1.1%
2.8%
4.8%
8.3%
6.3%
4.0%
3.4%
4.9%
5.8%
5.6%
5.8%
5.7%
5.3%
6.9%
3.7%
1.9%
1.0%
1.8%
3.6%
5.5%
1.14%
.58%
9.9%
9.4%
6.8%
5.6%
5.6%
9.9%
8.1%
9.6%
9.9%
7.3%
9.9%
8.9%
4.5%
4.0%
3.8%
6.0%
8.3%
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
0.6%
0.9%
0.2%
0.0%
1.4%
1.3%
0.5%
0.6%
0.4%
0.6%
0.6%
2.2%
0.1%
0.3%
0.7%
0.8%
0.7%
10.0%
7.2%
6.0%
6.0%
8.5%
8.7%
8.3%
8.5%
7.8%
8.5%
9.5%
4.8%
4.3%
4.0%
5.2%
7.2%
8.3%
Variance
Actual
Forecast
Year
Variance

Avg. Variance 1990-2006
Avg. Variance 2002-2006
Actual
Forecast
0.3%
0.8%
0.1%
0.7%
2.0%
2.1%
0.7%
0.6%
0.1%
1.5%
0.6%
0.0%
1.1%
0.1%
0.1%
0.5%
0.2%
7.6%
7.8%
6.9%
6.6%
5.9%
7.6%
5.5%
6.4%
5.6%
4.5%
6.4%
5.1%
5.2%
3.9%
4.1%
4.3%
4.3%
8.1%
7.1%
6.8%
5.8%
7.8%
5.7%
6.3%
5.8%
4.7%
6.3%
5.2%
5.1%
4.0%
4.3%
4.2%
4.5%
4.6%
9.4%
9.3%
8.2%
7.9%
7.2%
9.3%
6.9%
7.7%
6.8%
6.5%
8.0%
7.1%
7.1%
5.8%
5.6%
5.8%
6.3%
0.5%
0.7%
0.1%
0.8%
1.9%
1.9%
0.8%
0.6%
1.0%
1.8%
1.2%
0.0%
1.2%
0.4%
0.1%
0.2%
0.2%
9.7%
8.5%
8.2%
7.2%
9.2%
7.2%
7.6%
7.1%
6.7%
7.9%
7.4%
7.1%
6.1%
5.9%
5.8%
6.3%
6.1%
Variance
Actual
Forecast
Variance
Actual
Forecast
_________________________________________________________________________________________________________

SignalTrend is a newsletter service, not an investment advisor.  None of the information on our Site is intended as investment advice, as an
offer or solicitation of an offer to buy or sell, or as a recommendation, endorsement, or sponsorship of any security, company, or fund.
SignalTrend does not recommend short selling, the use of margin or any other form of leverage. Please speak to your investment advisor to
determine the suitability of any investment for your objectives and risk tolerance before using any information, product or service found in this
website. Carefully read any fund's prospectus before investing. All four Interest Rate forecasts went live February 1, 2007. Results prior to
2/1/07 are the result of backtesting. Results after that date reflect real time forecasts. Past performance is not a guarantee of future results.
Please read the following Terms of Use/Disclaimer before using any part of this website in any way. Your use of this site or any of
SignalTrend's  products, services or information  constitutes your agreement to abide by SignalTrend's Terms of Use/Disclaimer as
contained in the following link.
For mortgage, treasury and prime rates the percentages in the forecast columns represent January forecasts for
December interest rates. Each month the twelve month forecasts are revised. So, in January the December
forecasts are published. In February, 2007, the January, 2008 forecasts are published etc.
For CD rates the percentages in the forecast column represents January forecasts for June interest rates. Each
month the six month forecasts are revised. In January the June forecasts are published. In February the July
forecasts are published etc. For system test results from 1958,
click here.
2%
12%
10%
8%
2%
6%
12%
4%
10%
20%
8%
18%
6%
16%
4%
14%
20%
1965  1970  1975 1980  1985  1990  1995  2000  2005
18%
1965  1970  1975  1980 1985  1990  1995  2000  2005
16%
14%
22%
Prime
10 Year Treasury
30 Year Mortgage
6 Month CD
0.66%
0.38%
0.78%
0.40%
0.69%
0.50%
0.1%
2.2%
0.8%
0.4%
2.9%
1.2%
0.1%
1.1%
2.1%
1.2%
0.4%
4.1%
0.3%
0.0%
1.4%
1.2%
0.0%
Interest Rate Charts: 1965 - 2006
The 30 year mortgage graph was derived from FHA mortgages for the period 1/65-3/71 and from conventional mortgages from 4/71-12/06.
Source of interest rate data for the above charts and tables: Federal Reserve Bank of St. Louis.