On the other hand, trend-followers do not give good commentary, but they will tell you simply the direction of rates. There is no fancy words or stories, a trend is just a trend until it is not. You can put more words around it, but the elegance of trends is with simplicity.
Following the trend is a simpler more efficient way of making an interest rate forecast. A trend in rates is the aggregate behavior of buyers and sellers in involved in markets. This diverse crowd may provide a better estimate than a group of professionals because it is aggregation of their dollar votes.
Can a trend forecast tell you where interest rates will be in a year? Trends do not provide point estimates, but it can give direction and the trend can provide an extrapolation. The forecast contests have consistently found that extrapolative smoothing model models beat fundamental models. If the world changes, so will trends. There is no ego or second guessing.
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