Can Interest Rates Get Lower

There is still uncertainty about the future of Europe and about US policy. This combined with some encouraging news in the US economy may have caused the Treasury yields to bounce around in the past three weeks. The 10-year yield dipped to a low below 1.9% and rose above 2.1% during the period. However, through the close of business on December 9, yields have averaged a lower level in the past three weeks than they did during the previous four weeks. This may lead to possible lower transfer rates across the board for January 2012, as follows: January 2012 Projections* December 2011 Actual Additive Change % Change Short-Term AFR 0.19% 0.20% (0.01)% (4.0)% Mid-Term AFR 1.19% 1.27% (0.08)% (6.6)% Long-Term AFR 2.66% 2.80% (0.14)% (5.1)% 7520 Rate 1.40% 1.60% (0.20)% (12.5)% There is margin for error exists in these projections, since there are three days’ worth of data to be gathered before the official rates are calculated. As the year comes to a close, everyone should  be encouraged to revisit their personal situation so they can make any needed adjustments and keep within their means. With interest rates as low as they are, and with growing uncertainty about the future of tax policy, the very near future may be the best opportunity we’ll see in a long time to make adjustments to estate plans...unless rates get lower still.
This information is not intended as and should not be construed as investment, tax or legal advice.