- Joined
- 7 February 2014
- Posts
- 258
- Reactions
- 411
RBA is unlikely to cut in March IMO unless their is major fall in housing prices and/or the stock market.
RBA cash rate
- Thread starter grandia3
- Start date
-
- Tags
- cash rate interest rates rba
greggles
I'll be back!
- Joined
- 28 July 2004
- Posts
- 4,480
- Reactions
- 4,554
RBA slashes interest rates to a record low of 0.5% to counter coronavirus hit.
https://www.abc.net.au/news/2020-03-03/reserve-bank-slashes-interest-rates-over-coronavirus/12020950
We are certainly living in very interesting times. Can anyone recall the last time interest rates were this low?
tech/a
No Ordinary Duck
- Joined
- 14 October 2004
- Posts
- 20,417
- Reactions
- 6,356
Lowest they have ever been
The mob running the RBA now really are the worst we have had for a long time.
Zero rates have been tried for decades in other countries, all it does is stop those with money from spending.
Different if the interest rates are 5% down to 4% but if they really think dropping the rate from .75% to .5% is going to make any difference then they have no idea.
In today's world where so many people have savings (unlike the 50, 60s) when you cut interest rates to virtually nothing people stop spending.
Those with mortgages usually leave their repayments the same to reduce the loan quicker and the nett result is a slow down in spending, Exactly like what has been happening for the past year.
Zero rates have been tried for decades in other countries, all it does is stop those with money from spending.
Different if the interest rates are 5% down to 4% but if they really think dropping the rate from .75% to .5% is going to make any difference then they have no idea.
In today's world where so many people have savings (unlike the 50, 60s) when you cut interest rates to virtually nothing people stop spending.
Those with mortgages usually leave their repayments the same to reduce the loan quicker and the nett result is a slow down in spending, Exactly like what has been happening for the past year.
- Joined
- 8 June 2008
- Posts
- 12,891
- Reactions
- 18,896
another nail in the coffin of retirees savings and more worrying sensible risk reward ratio for business
Spot on.
greggles
I'll be back!
- Joined
- 28 July 2004
- Posts
- 4,480
- Reactions
- 4,554
Yes, I never thought I'd see rates this low. They're almost giving money away now.
The RBA are not going to be able to raise them much in a very long time, at least not until we get serious wages growth which I can't see happening anytime soon. People are out there getting mortgaged to the hilt with the expectation that interest rates will stay low for many, many years. There will be a lot of pressure on the government to keep them low as people struggle to service those mortgages.
Economic rationalism is dead. Now we have economic populism.
tech/a
No Ordinary Duck
- Joined
- 14 October 2004
- Posts
- 20,417
- Reactions
- 6,356
Banks give money away when they can smash you with high rates
I’ve lived through 18%
When I couldn’t pay that I was hit with 6% penalty interest
Pretty smart seeing I couldn’t pay the 18% in the first place!
can’t see interest rates over 5% for at least a generation.
I’ve lived through 18%
When I couldn’t pay that I was hit with 6% penalty interest
Pretty smart seeing I couldn’t pay the 18% in the first place!
can’t see interest rates over 5% for at least a generation.
greggles
I'll be back!
- Joined
- 28 July 2004
- Posts
- 4,480
- Reactions
- 4,554
Pressure on the RBA to cut rates further after the US Federal Reserve slashes rates by a full percentage point.
https://www.smh.com.au/politics/fed...tral-banks-move-on-virus-20200316-p54adk.html
I'd say an April rate cut is now pretty much a certainty now after the dramatic US rate cut. The only question is will it be a quarter of a percentage point or a half?
With ScoMo handing out $750 in cash to those on government benefits and official interest rates rapidly approaching 0.00%, we appear to be spiraling into a national and global economic crisis.
Where is this all going to end?
https://www.smh.com.au/politics/fed...tral-banks-move-on-virus-20200316-p54adk.html
I'd say an April rate cut is now pretty much a certainty now after the dramatic US rate cut. The only question is will it be a quarter of a percentage point or a half?
With ScoMo handing out $750 in cash to those on government benefits and official interest rates rapidly approaching 0.00%, we appear to be spiraling into a national and global economic crisis.
Where is this all going to end?
Gunnerguy
Property, Index Investor & new Options trader
- Joined
- 27 July 2010
- Posts
- 366
- Reactions
- 656
wayneL
VIVA LA LIBERTAD, CARAJO!
- Joined
- 9 July 2004
- Posts
- 25,793
- Reactions
- 13,010
Whimps.
Dona Ferentes
Abrió la caja, vio al gatito, y sonrió
- Joined
- 11 January 2016
- Posts
- 15,784
- Reactions
- 21,521
So, 15 or 40 pts in June, after the election?
Last edited:
UMike
Klutzing in Thai
- Joined
- 16 January 2007
- Posts
- 1,455
- Reactions
- 1,808
Politics for sure.
wayneL
VIVA LA LIBERTAD, CARAJO!
- Joined
- 9 July 2004
- Posts
- 25,793
- Reactions
- 13,010
It really should be 4% as painful as that would be in the short term. Not politically feasible though, but I don't think the market will like anything less than the .4.
wayneL
VIVA LA LIBERTAD, CARAJO!
- Joined
- 9 July 2004
- Posts
- 25,793
- Reactions
- 13,010
This is how far from reality that we have strayed in this country and across the Western world, where a cash rate increase of 0.25%... ZERO POINT TWO FIVE... is seen as a "MASSIVE BLOW".
I wonder what superlatives the media will have when we are at 5 or 7 percent, (or more)?
I wonder what superlatives the media will have when we are at 5 or 7 percent, (or more)?
- Joined
- 28 August 2010
- Posts
- 1,154
- Reactions
- 1,720
better then nothing I guess ?
wayneL
VIVA LA LIBERTAD, CARAJO!
- Joined
- 9 July 2004
- Posts
- 25,793
- Reactions
- 13,010
I would perhaps call it a shot across the bow... "massive blows" will come later.
I think it is a reasonable rise, given the huge loans in the cities it will act as a brake on the economy.
Us experienced people know how it works but my neighbour has been a builder for 10 years and can have no idea how quickly work can stop.
I have tried to tell him to be a bit wary but he says I have 30 jobs on my books, if that drops below 20 then I will accept your advice
Us experienced people know how it works but my neighbour has been a builder for 10 years and can have no idea how quickly work can stop.
I have tried to tell him to be a bit wary but he says I have 30 jobs on my books, if that drops below 20 then I will accept your advice
- Joined
- 19 February 2016
- Posts
- 942
- Reactions
- 1,523
If passed on in full by banks, the rate rise will add $65 a month to repayments on a $500,000 mortgage, and double that on a million-dollar loan.
If you can afford a $500,000 mortgage - you can afford an additional $65/month. But I (we all) doubt the rate increases are stopping here so when that number creeps up into the hundreds each month - what will be the outcome? Probably the lower income defaulting and the higher income ending up getting cheap houses.
I would not want to be the incoming government - but I would love to be in the media with all the scare pr0n they're going to be publishing on this topic.
- Joined
- 20 July 2021
- Posts
- 11,437
- Reactions
- 15,882
By James Glynn and David Winning
SYDNEY -- The Reserve Bank of Australia raised its benchmark interest rate for the first time in more than a decade, acting to tame elevated inflation that is threatening the country's economic recovery from the Covid-19 pandemic.
The RBA lifted the cash rate to 0.35%, from 0.10%, and signaled further increases are likely as it seeks to bring long-term inflation back toward its 2%-3% target. It represents a significant gear shift by the RBA, which as recently as March had been signaling patience even as other global central banks laid Fthe groundwork for aggressive moves to tighten monetary policy.
The Federal Reserve has signposted a rapid series of interest-rate increases as U.S. inflation runs at its fastest pace in decades and the labor market remains extremely tight. The Bank of Canada recently lifted its target for the overnight rate by a half-percentage point from 0.50% to 1.0%, its biggest rate increase in over two decades. The Reserve Bank of New Zealand raised its policy rate by a half-percentage point last month, and left the door open to another similar oversize increase at its May meeting.
Australia shows how inflation can become a problem even while an economy benefits from higher prices of key exports, such as iron ore and coal, as the war in Ukraine heightens concerns around shortages of key commodities and Covid-related lockdowns in the key manufacturing hub of Shanghai disrupt supply chains.
The consumer-price index rose 5.1% on year in the first quarter, with core inflation also soaring above the RBA's inflation target at 3.7% on year. Economists noted that quarterly inflation has only been higher once in the past three decades: when Australia introduced a 10% goods and services tax in July 2000.
"The board is committed to doing what is necessary to ensure that inflation in Australia returns to target over time," RBA Gov. Philip Lowe said in a statement explaining the central bank's decision on Tuesday. "This will require a further lift in interest rates over the period ahead."
Mr. Lowe forecast core inflation of around 4.75% this year, with headline CPI of around 6%. The RBA expects both inflation measures to return to around 3% by the middle of 2024, he said.
Australian businesses are having a tough time riding out the impact of elevated inflation, while surveys suggest consumers are increasingly downbeat and tightening budgets. The RBA's interest-rate rise also comes at a sensitive time politically, with the rising cost of living becoming a key issue in Australia's national election later this month.
Cleanaway Waste Management Ltd., which collects household trash in cities including Sydney, on Tuesday warned that rising fuel prices and labor shortages meant it was likely to miss expectations for annual profits. Recent flooding in Australia's east coast has also pushed up costs by damaging property, vehicles and equipment while forcing a landfill site to close temporarily.
Joshua Phipps said he is having to offer bigger wages to retain staff at MarketMakers, the small residential blinds and curtains supplier that he co-founded in southwest Sydney. At the same time, shipping costs for imported supplies from factories in China have quadrupled, he said.
"The talk that there hasn't been wage rises is garbage as far as I'm concerned," said Mr. Phipps, 51. "We've paid all staff 5% for the last two years."
Still, he said business is booming for now and the company has been able to pass on some of the increased costs to customers.
Higher borrowing costs will test the stability of Australia's housing market, which is one of the most indebted in the developed world. The RBA last raised interest rates in November 2010. Around one million homeowners with mortgages across the country have never experienced a time when interest rates were going up.
Emma Edmonds is one of them. The 30-year-old got a first foothold on the property ladder around a decade ago and took on a mortgage of 700,000 Australian dollars, equivalent to $494,000, three years ago when moving to the South Sydney home where she lives with her family, including three children.
"Having not seen a rate rise in the 11 years of having a mortgage you get comfortable and you do forget that it could always go up at any second," she said.
Ms. Edmonds said she knows many people with several credit cards from different banks who are vulnerable to rising borrowing costs. "I know that if the rates go up, they are going to be not comfortable at all," she said.
Market bets suggest the RBA could raise interest rates by around 2.5 percentage points by December, inclusive of Tuesday's increase.
While many people have used the extended period of record-low interest rates to get ahead in their mortgage repayments, others could become increasingly stressed financially. The impact could be amplified if house prices fall in response to rising rates and people curb their spending because they feel less wealthy.
The RBA last month sounded a warning that the housing market is looking more fragile, as more households have taken on high levels of debt relative to their incomes. Its modeling suggests a two-percentage-point rise in the benchmark interest rate would lead to house prices falling by 15%.
Write to James Glynn at james.glynn@wsj.com and David Winning at david.winning@wsj.com
(END) Dow Jones Newswires
May 03, 2022 01:58 ET (05:58 GMT)
this breaks a time honoured tradition that the RBA does not raise rates close to a Federal Election
one MIGHT imply the RBA is in deep distress ( causing it to break a time-honored tradition )
now IF the current government is removed at the next election , the RBA will receive much of the blame ( whether they deserve it or not )
but i am guessing a 3% ( total ) interest rate by December won't do enough to slow inflation , nor be high enough to allow significant cuts , if our economy implodes ( say , because we really do go to war with China )
SYDNEY -- The Reserve Bank of Australia raised its benchmark interest rate for the first time in more than a decade, acting to tame elevated inflation that is threatening the country's economic recovery from the Covid-19 pandemic.
The RBA lifted the cash rate to 0.35%, from 0.10%, and signaled further increases are likely as it seeks to bring long-term inflation back toward its 2%-3% target. It represents a significant gear shift by the RBA, which as recently as March had been signaling patience even as other global central banks laid Fthe groundwork for aggressive moves to tighten monetary policy.
The Federal Reserve has signposted a rapid series of interest-rate increases as U.S. inflation runs at its fastest pace in decades and the labor market remains extremely tight. The Bank of Canada recently lifted its target for the overnight rate by a half-percentage point from 0.50% to 1.0%, its biggest rate increase in over two decades. The Reserve Bank of New Zealand raised its policy rate by a half-percentage point last month, and left the door open to another similar oversize increase at its May meeting.
Australia shows how inflation can become a problem even while an economy benefits from higher prices of key exports, such as iron ore and coal, as the war in Ukraine heightens concerns around shortages of key commodities and Covid-related lockdowns in the key manufacturing hub of Shanghai disrupt supply chains.
The consumer-price index rose 5.1% on year in the first quarter, with core inflation also soaring above the RBA's inflation target at 3.7% on year. Economists noted that quarterly inflation has only been higher once in the past three decades: when Australia introduced a 10% goods and services tax in July 2000.
"The board is committed to doing what is necessary to ensure that inflation in Australia returns to target over time," RBA Gov. Philip Lowe said in a statement explaining the central bank's decision on Tuesday. "This will require a further lift in interest rates over the period ahead."
Mr. Lowe forecast core inflation of around 4.75% this year, with headline CPI of around 6%. The RBA expects both inflation measures to return to around 3% by the middle of 2024, he said.
Australian businesses are having a tough time riding out the impact of elevated inflation, while surveys suggest consumers are increasingly downbeat and tightening budgets. The RBA's interest-rate rise also comes at a sensitive time politically, with the rising cost of living becoming a key issue in Australia's national election later this month.
Cleanaway Waste Management Ltd., which collects household trash in cities including Sydney, on Tuesday warned that rising fuel prices and labor shortages meant it was likely to miss expectations for annual profits. Recent flooding in Australia's east coast has also pushed up costs by damaging property, vehicles and equipment while forcing a landfill site to close temporarily.
Joshua Phipps said he is having to offer bigger wages to retain staff at MarketMakers, the small residential blinds and curtains supplier that he co-founded in southwest Sydney. At the same time, shipping costs for imported supplies from factories in China have quadrupled, he said.
"The talk that there hasn't been wage rises is garbage as far as I'm concerned," said Mr. Phipps, 51. "We've paid all staff 5% for the last two years."
Still, he said business is booming for now and the company has been able to pass on some of the increased costs to customers.
Higher borrowing costs will test the stability of Australia's housing market, which is one of the most indebted in the developed world. The RBA last raised interest rates in November 2010. Around one million homeowners with mortgages across the country have never experienced a time when interest rates were going up.
Emma Edmonds is one of them. The 30-year-old got a first foothold on the property ladder around a decade ago and took on a mortgage of 700,000 Australian dollars, equivalent to $494,000, three years ago when moving to the South Sydney home where she lives with her family, including three children.
"Having not seen a rate rise in the 11 years of having a mortgage you get comfortable and you do forget that it could always go up at any second," she said.
Ms. Edmonds said she knows many people with several credit cards from different banks who are vulnerable to rising borrowing costs. "I know that if the rates go up, they are going to be not comfortable at all," she said.
Market bets suggest the RBA could raise interest rates by around 2.5 percentage points by December, inclusive of Tuesday's increase.
While many people have used the extended period of record-low interest rates to get ahead in their mortgage repayments, others could become increasingly stressed financially. The impact could be amplified if house prices fall in response to rising rates and people curb their spending because they feel less wealthy.
The RBA last month sounded a warning that the housing market is looking more fragile, as more households have taken on high levels of debt relative to their incomes. Its modeling suggests a two-percentage-point rise in the benchmark interest rate would lead to house prices falling by 15%.
Write to James Glynn at james.glynn@wsj.com and David Winning at david.winning@wsj.com
(END) Dow Jones Newswires
May 03, 2022 01:58 ET (05:58 GMT)
this breaks a time honoured tradition that the RBA does not raise rates close to a Federal Election
one MIGHT imply the RBA is in deep distress ( causing it to break a time-honored tradition )
now IF the current government is removed at the next election , the RBA will receive much of the blame ( whether they deserve it or not )
but i am guessing a 3% ( total ) interest rate by December won't do enough to slow inflation , nor be high enough to allow significant cuts , if our economy implodes ( say , because we really do go to war with China )
