Since the last 0.25% rate increase on July 20, the bankers’ acceptance futures have been quite calm. We have the following quotations:
| Month / Strike | Bid Price | Ask Price | Settl. Price | Net Change | Vol. |
| + 10 AU | 0.000 | 0.000 | 98.905 | -0.005 | 0 |
| + 10 SE | 98.825 | 98.835 | 98.825 | 0.000 | 1825 |
| + 10 OC | 0.000 | 0.000 | 98.725 | -0.005 | 0 |
| + 10 DE | 98.700 | 98.710 | 98.700 | 0.010 | 6190 |
| + 11 MR | 98.580 | 98.590 | 98.580 | 0.010 | 4636 |
| + 11 JN | 98.460 | 98.470 | 98.460 | 0.010 | 2213 |
| + 11 SE | 98.310 | 98.320 | 98.310 | 0.000 | 904 |
| + 11 DE | 98.140 | 98.150 | 98.130 | 0.010 | 303 |
| + 12 MR | 97.950 | 97.960 | 97.940 | 0.020 | 104 |
| + 12 JN | 97.770 | 97.790 | 97.760 | 0.020 | 54 |
This still hints that the short term rate will rise 0.25% by the September 8 or October 20 meeting, and the short term rate will end the year at 1.00% with a possibility of 1.25%. For the year 2011, rates are expected to inch higher by about 0.5 to 0.75%.
It should also be noted that at present, 3-month corporate paper is yielding 0.89%. This was approximately 0.4% half a year ago.
Finally, since 5-year bond rates have dropped considerably over the same time period (which is counter-intuitive to the economics 101 texts that state that longer-term bond yields will rise with an increase in interest rates), 5-year fixed term mortgages should also drop – the best one I can see so far is 3.87%.