RBA cash rate

[CityIndex]

I wonder if this lower RBA rate is not already impacting the AUD greatly.
If you look at the last hours:US market etc, it is following a well used scenario
US Market great jump, USD falling against euro, British pound, yen etc BUT not the AUD

It could very well be the case. Although we might continue to see a broader USD pullback on rising speculation that the Fed may slow the pace of tightening, the RBA is the only major central bank who has actually made the pivot.

Taking look at the RBNZ as well, despite recent comments about their rate hike cycle being "very mature", they elected for another 50bps move today, and AUD/NZD is currently trading broadly lower as a result.

 

[moXJO]

Might be political pressure regarding the rba.
Plenty of whinging going on by the over leveraged.

 

[divs4ever]

well if you were unwise enough to over-leverage ( especially by buying property late in the cycle ) you might be screaming and begging

i wonder if the 'whingers' are those ALP MPs with substantial property holdings

 

[Gunnerguy]

Are we all waiting with bated breath ???

 

[frugal.rock]

At its meeting today, the Board decided to increase the cash rate target by 25 basis points to 2.85 per cent. It also increased the interest rate on Exchange Settlement balances 25 basis points to 2.75 per cent.

Statement by Philip Lowe, Governor: Monetary Policy Decision | Media Releases

www.rba.gov.au

 

[waterbottle]

Hmmmm Phil Lowe leading the pivot charge

 

[mullokintyre]

So, do we now expect a breather in the rates rises till perhaps the feb meeting so that they can see what impact the previous rate rises have on the inflation?
It may stop people buying lots of things, including houses, but its questionable as to whether it will stall the price increases.
mick

 

[CityIndex]

So, do we now expect a breather in the rates rises till perhaps the feb meeting so that they can see what impact the previous rate rises have on the inflation?

This could be the possible next step.

The statement following the meeting reiterated what they've been saying for a few months now. The Board plans to continue raising rates for the period ahead, with the size and timing depending on incoming data.

So, given that they did also revise their inflation forecasts higher, now seeing the peak at 8% this year, perhaps the decision to maintain a slower pace of tightening means they can continue hiking over the coming months instead of taking a breather.

 

[divs4ever]

Are we all waiting with bated breath ???

NOPE !! i was sleeping all through it ( and that horse race )

 

[waterbottle]

Keep in mind the RBA can hike monthly whereas the Fed can't. Central Bankers have also publicly stated that they're acting in unison.

The shift to smaller rates may be part of a global strategy but it could also be an issue of practicality rather than a signal for a true pivot.

I still think Powell's statement will be critical, but I'm admittedly betting on a rally.

 

[divs4ever]

So, do we now expect a breather in the rates rises till perhaps the feb meeting so that they can see what impact the previous rate rises have on the inflation?
It may stop people buying lots of things, including houses, but its questionable as to whether it will stall the price increases.
mick

yep , i mostly agree , if the RBA really wanted to tackle inflation ( above all ) it would have moved 0.5% or more ( and tried the 'shock factor' )

i had been thinking a wimpish 0.4% ( and am obviously wrong )

now December .. THAT is a puzzler will the RBA be the Grinch that crushes Christmas for the battler ( and retailer ) ( who wants to recover from Christmas activities to face new increased fees and charges and interest rate hikes .. which will be slow to trickle down to savers )

stall increases ( apart from houses ) ?? i suspect not i think the RBA is too far behind the target for that and might actually fuel increases

in the past when the inflation fight is on , the official rates have been much close to the CPI ( official and real CPI )

will be interesting to see if they revamp CPI calculations ( again )

 

[divs4ever]

Keep in mind the RBA can hike monthly whereas the Fed can't. Central Bankers have also publicly stated that they're acting in unison.

The shift to smaller rates may be part of a global strategy but it could also be an issue of practicality rather than a signal for a true pivot.

I still think Powell's statement will be critical, but I'm admittedly betting on a rally.

some Central Banks are truly independent ( Russia and Turkey for two , but non-aligned are getting rarer )

the US Fed will be under pressure to try and save the ( Dem) mid-terms , so that pause ( if it happens ) could more political than strategic

much of the global economy has it's foot in the bear trap and mommy bear and the cubs are coming back to see what they caught

 

[JohnDe]

some Central Banks are truly independent ( Russia and Turkey for two , but non-aligned are getting rarer )

the US Fed will be under pressure to try and save the ( Dem) mid-terms , so that pause ( if it happens ) could more political than strategic

much of the global economy has it's foot in the bear trap and mommy bear and the cubs are coming back to see what they caught

Are you saying that the Australian & US central/federal banks are not independent?

 

[divs4ever]

Are you saying that the Australian & US central/federal banks are not independent?

since the certain very large banks are shareholders ( and it is difficult to see WHICH very large banks are the share-holders ) one could call ( most of ) them a cabal cooperating within the BIS framework

they are mostly detached from the Federal Government ( Australia , UK , US and several others ) with politicians appointing the chair ( for the US Fed ) and governor ( in Australia and UK )

but certain WEF presentations shows the senior ( central ) bankers working towards a defined agenda ( not national policy )

 

[Smurf1976]

The shift to smaller rates may be part of a global strategy but it could also be an issue of practicality rather than a signal for a true pivot.

That the RBA does it more often would naturally bias them toward smaller increments if there's some aim to keep roughly in step with other central banks.

That alone could explain the decision.

 

[basilio]

The RBA has said today it will continue to raise interest rates until inflation recedes.

BUT.... We know for certain that the current Australia wide floods will result in losses of many vegetable crops and inevitably the cost of remaining veges will jump.
The cereal crops are also underwater so the price of remaining wheat, barley ect will jump forcing up all cereal based produce.

There will be massive damage to roads, infrastructure and buildings that will need to be addressed in the next 2-3 months. How will this not affect cost pressures on materials and labour ?

There has to be a sharp increase in replacement of much flood damaged goods. More pressure on prices.

It seems impossible to control inflation in the next 3 months unless we absolutely smash the economy . Is that what is intended ?

Interest rates to keep rising as RBA warns it will do ‘what is necessary’ to curb inflation

Reserve Bank governor Philip Lowe says half percentage point increases to cash rate possible if economic conditions do not improve

www.theguardian.com

 

[againsthegrain]

That the RBA does it more often would naturally bias them toward smaller increments if there's some aim to keep roughly in step with other central banks.

That alone could explain the decision.

They are playing at as safe as possible, did anybody see the media headlines? According to the media .25 was a horror rate increase ?

Under so much media fire and fist shaking a more spread out rapid fire of .25 stings seems more chance to put the public to sleep then with a few .50 slugs ringing in the new year that the ass is falling out the world.

 

[JohnDe]

since the certain very large banks are shareholders ( and it is difficult to see WHICH very large banks are the share-holders ) one could call ( most of ) them a cabal cooperating within the BIS framework

they are mostly detached from the Federal Government ( Australia , UK , US and several others ) with politicians appointing the chair ( for the US Fed ) and governor ( in Australia and UK )

but certain WEF presentations shows the senior ( central ) bankers working towards a defined agenda ( not national policy )

My understanding of your statements -

‘Unknown large banks are shareholders of the Australian Reserve Bank. Communication from the banks and the RBA leads to cooperation within the BIS. Some WEF presentation proves that senior members of Reserve Banks of certain countries are acting on their own agenda, and not the national policy.’​

Have I deciphered your posts correctly?

 

[Gunnerguy]

some Central Banks are truly independent ( Russia and Turkey for two , but non-aligned are getting rarer )

the US Fed will be under pressure to try and save the ( Dem) mid-terms , so that pause ( if it happens ) could more political than strategic

much of the global economy has it's foot in the bear trap and mommy bear and the cubs are coming back to see what they caught

Turkey CB independent. What are you smoking ?? Eradogan controls the CB and just reduced IR. His personal thesis is that he does not believe increasing IR will reduce inflation. I’ll find the reference for you sometime. I believe he has changed/removed some CB officials recently because he did not agree with their strategies.

 

[Value Collector]

since the certain very large banks are shareholders ( and it is difficult to see WHICH very large banks are the share-holders ) one could call ( most of ) them a cabal cooperating within the BIS framework

they are mostly detached from the Federal Government ( Australia , UK , US and several others ) with politicians appointing the chair ( for the US Fed ) and governor ( in Australia and UK )

but certain WEF presentations shows the senior ( central ) bankers working towards a defined agenda ( not national policy )

There are no “shareholders” of the federal reserve in the way that we normally understand the word shareholders.

The Federal reserve have Members who must subscribe to stock in the fed reserve by depositing 6% of their capital base, but they don’t receive any profits, those are passed along to the government.