I have been talked to a bank loan underwriter manager. We talked about future rate direction. He thinks the rate will going a bit lower in near future but will pick up in Summer. But the key point is not this. Everyone says the credit tighten from bank at this stage is due to less money flowing through (no one buying treasure notes). So Fed uses QEn to solve the problem. He told me that the truth is the big money flowing out of US to chase higher return than 3~4% in US bond market. No matter how much QEn, the new (QEn) money will continue to flow out of US. Those big money only chase more return (low risk of cause). Only way to keep the money in US is to give higher return (>5% in bond).
Someone could argue that higher rate will increase the cost of borrower (mainly small business), not good for small business. The truth is that rate is not the only reason for the cost. Bank charges more fees to increase the profit from small business loan. QEn will not help in this case. The key is to have reasonable interest rate with low risk to attract more big money to compete. Current situation is that big money worry about the risk in US bond market with such low return. QEn only push the big money away from US.
The banker believes that the QEn has less and less impact on interest rate. The rate has to go higher to reasonable level to help the big money flow back to US. Of cause, War is other way to do it. Do not want to speculate on this.