These are my reasons why I will not panic if interest rates spike higher in the next couple of months.
We all know, or ought to know, that the USA bond market is the biggest bubble in human history. It may well be bigger than the sum of all other bubbles before it, one day it will implode, and it will take all with it - except for Silver, Gold, and some commodities.
With the circus coming out of the USA about the debt ceiling, is it now?
It may well be, but my indicators tell me otherwise.
If the selloff in the 10-year bonds continue well into June 2023 (or even July 2023), and close the month at near the highs of the sell off, I would not smirk, because I know that a rare technical analysis reversal signal will come in play.
This will be confirmed, circa the same time, with something not nice gonna happen to the stock market.
The market can change its mind in double quick time, and if it does, it will be reflected in the technical indicators and all bets will be off.
If correct, then I expect lower interest rates thereafter followed by the next interest rate cycle bust circa 2026 – which may be a nasty one.
As for the RBA cash rate, the market expects the next 0.25% rate increase to be close to the terminal cash rate.
I would therefore choose to stay variable on my home loan. You need to do you own research and seek advice from those that you chose to deal your home loan with.