RBA cash rate

mullokintyre · 17 November 2022

According to one of the many economics journos, todays reduction in the unemployment rate means we are more than likely to get another rate rise before Christmas, though the size of it is not stated,
From The Evil Murdoch press

Australians look destined to cop an eighth straight rate hike in the lead up to Christmas, after stronger-than-expected jobs figures showed unemployment dropped back to its 48-year low of 3.4 per cent in October.
Despite the Reserve Bank’s aggressive efforts to slow demand in order to tame this year’s inflationary surge, the number of workers climbed by 32,000 in the month – or twice what had been anticipated, according to the Australian Bureau of Statistics.

That helped push the key jobless measure down by 0.1 percentage points to 3.4 per cent, where it was in July and the lowest since 1974.

Underemployment – which measures those with jobs but who would like to work more hours but are unable to find them – inched lower to 5.9 per cent, from 6 per cent.

The labour force participation rate remained at 66.5 per cent, the seasonally adjusted figures revealed.

All up, the figures showed the jobs market remained tight as a drum, with a record number of people in work and hundreds of thousands fewer unemployed than prior to the pandemic.
The number of job vacancies essentially matches the number of people looking for a job.

With employment still growing, and the hours worked by those in employment still going up, it is hard to see where the expected slowdown from previous rate hikes is going to come from.
The Policies of the RBA actively encouraged a massive housing bubble, and it is possible that the housing bubble may be pricked without reducing inflation, though even that may be overcome by events.
There is still a lot of money floating around the system, with pretty much every arm of government running expanded deficits, and a couple of state and fed governments handing out stimmy checks to people as election ploys to buy votes, its pretty hard to see where the contraction is going to come from.
Albo has promised another 10,000 homes for those who don't have them, so that will put a little more pressure on the lack of timber, steel, bathroom goods, furnishings and carpets as they compete with all the thousands of households devastated by flood waters.
Many people devastated by fires two years ago are still waiting to rebuild because of shortages of everything from sensible local councils to tradies.
Mick

Telamelo · 28 November 2022

Reserve Bank governor Philip Lowe has apologised to Australians who may regret taking out a home loan off the back of claims interest rates would remain unchanged until 2024.

Meanwhile, during recent interest rate hike RBA boss celebrated afterwards by enjoying expensive champagne at a gala dinner with a smirk on his face (as seen on t.v.)

https://www.news.com.au/finance/economy/interest-rates/reserve-bank-chief-philip-low-sorry-for-interest-rate-call/news-story/2136ca52bfb1d08407a05da6058b5d3b

mullokintyre · 6 December 2022

So whats the bet on the RBA meeting today?
I am going for a 25 basis points increase.
There has been some arguments that a 015 basis points rise is in order to "round it up" to 3.00 percent.
However, given that there is no meeting in January, so likely there is no change in that month, a 15 basis points rise followed by no rise might give the impression that rates have topped out.
I am sure the RBA would like to have rates topped out, however, there has not been sufficient data to warrant it.
Mick

divs4ever · 6 December 2022

i am going for a 0.5% rise with a lesser chance of a 0.4% rise

IMO we still need a 0.75% rise but i think the RBA will lack the courage to do that

BTW i have been wrong before ( don't bet the farm on my guesses , 'cos i won't be )

rcw1 · 6 December 2022

Good morning
0.50 % rise.

Have a very nice day, today.

Kind regards
rcw1

againsthegrain · 6 December 2022

.25 or lower, the media is squeeling like a gutted pig and lowe is sweating from all the personal attacks and pitchforks altho we all know we need a .50%+ pill

divs4ever · 6 December 2022

againsthegrain said:
.25 or lower, the media is squeeling like a gutted pig and lowe is sweating from all the personal attacks and pitchforks altho we all know we need a .50%+ pill

that appears to be the consensus ( 0.25% )

but since the initial rate rises were late , this is basically virtue-signalling

mullokintyre · 6 December 2022

So we got the 25 point increase.
Nothing more till feb meeting.
Cash rate at its highest level since 2012 when it was 3.25.
Mick

KevinBB · 6 December 2022

The increased rate is still, however, below the long term average interest rate of (say) 5%.

Keep on increasing the rate, Phil!

KH

divs4ever · 6 December 2022

chances are it will only further fuel inflation , but the decision is made

one tiny fragment of uncertainty removed for the rest of the month

macca · 6 December 2022

I will have to disagree with the general consensus on here.

I believe that it should not have been raised as the impact of the previous increases have not flown through to household spending yet. I think we need a pause until February retail figures are in.

I think when our "so called RBA expert" publicly stated that there would be no interest rate increase for at least 18 months that encouraged a lot of youngish people to jump into home ownership rather than wait for the market to cool.

The FOMO was huge because there was now no reason for the price surge to stop.

He then proceeded to raise the interest rate to be 31 times higher than it was when he made the statement.

If that is not incompetence worthy of dismissal then what does one need to do to get the sack?

In the cities the general working people are bleeding because of his stuff up.

Folk always spend at Christmas and they will again this time but come January the economy will drop off a cliff and stay there for some time.

The total dollar TO may stagnate, held up by inflation, but the volume of sales will drop as folk struggle to meet their repayments

Simply by trying to provide a home for their family they got suckered into a very deep pile of **** by a person promoted way beyond his ability.

frugal.rock · 6 December 2022

KevinBB said:
Keep on increasing the rate, Phil!

The Lynch mob's are assembling Phill, and guess what... they ain't old fuddy duddys with cash in the bank.

I think Phil is a gene away from being a Koala.

waterbottle · 6 December 2022

macca said:
I will have to disagree with the general consensus on here.

I believe that it should not have been raised as the impact of the previous increases have not flown through to household spending yet. I think we need a pause until February retail figures are in.

I think when our "so called RBA expert" publicly stated that there would be no interest rate increase for at least 18 months that encouraged a lot of youngish people to jump into home ownership rather than wait for the market to cool.

The FOMO was huge because there was now no reason for the price surge to stop.

He then proceeded to raise the interest rate to be 31 times higher than it was when he made the statement.

If that is not incompetence worthy of dismissal then what does one need to do to get the sack?

In the cities the general working people are bleeding because of his stuff up.

Folk always spend at Christmas and they will again this time but come January the economy will drop off a cliff and stay there for some time.

The total dollar TO may stagnate, held up by inflation, but the volume of sales will drop as folk struggle to meet their repayments

Simply by trying to provide a home for their family they got suckered into a very deep pile of **** by a person promoted way beyond his ability.

We do have a pause - for a month - RBA will next meet on Feb 7th.

Emergency meetings are still possible should it be required.

Phil Lowe's hands are tied here, as are the rest of the central bankers. They're all being dragged along by the Fed.

Alot of people were struggling without this hike. Savings are near pre-COVID levels, so any buffers that once existed are now virtually exhausted. In my circle, the struggle is tied to housing repayments. People did not fix and were shocked by how quickly rates rose.

divs4ever · 7 December 2022

macca said:
I will have to disagree with the general consensus on here.

I believe that it should not have been raised as the impact of the previous increases have not flown through to household spending yet. I think we need a pause until February retail figures are in.

I think when our "so called RBA expert" publicly stated that there would be no interest rate increase for at least 18 months that encouraged a lot of youngish people to jump into home ownership rather than wait for the market to cool.

The FOMO was huge because there was now no reason for the price surge to stop.

He then proceeded to raise the interest rate to be 31 times higher than it was when he made the statement.

If that is not incompetence worthy of dismissal then what does one need to do to get the sack?

In the cities the general working people are bleeding because of his stuff up.

Folk always spend at Christmas and they will again this time but come January the economy will drop off a cliff and stay there for some time.

The total dollar TO may stagnate, held up by inflation, but the volume of sales will drop as folk struggle to meet their repayments

Simply by trying to provide a home for their family they got suckered into a very deep pile of **** by a person promoted way beyond his ability.

i understand your logic and had the RBA moved earlier ( and more carefully ) you would probably be correct BUT this would be only Xmas 2021

a lot of the world in plummeting towards CRAP and the RBA desperately needs all the 'wiggle-room ' it can get , BUT not stampede the masses

this has been a major long-term stuff up by several large nations

this mess has been years in the making and tonnes of band-aids wasted in the process

BTW it is always the working class ( and middle class ) that wear the debt burden

just beware of elites providing solutions ( it was their supervision that allowed the problem to fester , because they control who stands for election )

farmerge · 7 December 2022

waterbottle said:
We do have a pause - for a month - RBA will next meet on Feb 7th.

Emergency meetings are still possible should it be required.

Phil Lowe's hands are tied here, as are the rest of the central bankers. They're all being dragged along by the Fed.

Alot of people were struggling without this hike. Savings are near pre-COVID levels, so any buffers that once existed are now virtually exhausted. In my circle, the struggle is tied to housing repayments. People did not fix and were shocked by how quickly rates rose.

Its the usual scenario those that least afford to pay are the ones paying the most the price of having incompetents in charge. Its not hurting them any interest rate rises, still being able to afford the "I'm entitled to" the luxuries of life.

macca · 7 December 2022

I do agree that it has been coming for years but here in Oz we propped up the economy by borrowing money to give away, beyond stupid IMO

We have a generation of people who have never experienced a slow down, I have a builder friend who has been self employed for 12 years and has never seen an interest rate increase or the effects it Will have on his business.

But the thing that Really pisses me off is that people were told by the Expert there would be no interest rate rise until 2024.

Beyond incompetence, just a stupid thing to say, if he is any good he Must know that anything can happen but the general populous read in the media "no interest rate increase until 2024" and they believe it.

Poor suckers

waterbottle · 7 December 2022

macca said:
I do agree that it has been coming for years but here in Oz we propped up the economy by borrowing money to give away, beyond stupid IMO

We have a generation of people who have never experienced a slow down, I have a builder friend who has been self employed for 12 years and has never seen an interest rate increase or the effects it Will have on his business.

But the thing that Really pisses me off is that people were told by the Expert there would be no interest rate rise until 2024.

Beyond incompetence, just a stupid thing to say, if he is any good he Must know that anything can happen but the general populous read in the media "no interest rate increase until 2024" and they believe it.

Poor suckers

True, the poor communication is what has hurt people the most.
Unfortunately modern western society is built on borrowing from the future and I don't think there's an alternative.

againsthegrain · 7 December 2022

There were people saying be careful rates are at the bottom and there is only 1 way up, they were drowned out by the media and all the re gurus, perhaps even Lowe was over quoted for their agenda, now the same media is playing the mini violin once again for their own agenda and clicks. This is where I lay the blame.

Also I think the rba started this mess by dropping the rates too low in the first place.

Nobody is innocent

Smurf1976 · 7 December 2022

againsthegrain said:
There were people saying be careful rates are at the bottom and there is only 1 way up, they were drowned out by the media and all the re gurus, perhaps even Lowe was over quoted for their agenda

Biggest problem with all these issues is the limited attention span of the public and the media’s fuelling of it.

It’s not an issue that can be covered in 30 seconds and which has a simple answer but sadly that’s what many do, they just aren’t interested in publishing or reading complex discussion.

Same happens with everything. Mainstream media is far, far too simplified.

divs4ever · 7 December 2022

againsthegrain said:
There were people saying be careful rates are at the bottom and there is only 1 way up, they were drowned out by the media and all the re gurus, perhaps even Lowe was over quoted for their agenda, now the same media is playing the mini violin once again for their own agenda and clicks. This is where I lay the blame.

Also I think the rba started this mess by dropping the rates too low in the first place.

Nobody is innocent

the RBA is nearly always reactionary ( late to the party ) , the media is all about 'eyes ' ( advertising revenue ) even to the extent of manufacturing the story to attract 'eyeballs '

RBA cash rate

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