RBA cash rate

[Junior]

As I was itting around waiting for todays RBA rates decision, I was idle looking at the RBA website.
This chart from the RBA highlights how from an histroric perspective, the rates of tay are nothing special in that they are still lower than at any time from 1990, and if the chart had more historical data, would go back even further would show that it is less than any valueof the cash rate as far back as 1969.
View attachment 162028
Not sure why we are all whinging about rates.
Mick

Because debt levels are far far higher now, then they were during previous cycles.

And because of the sudden and unexpected nature of the increase.

 

[mullokintyre]

The RBA has very kindly left rates as they were, so unchanged now for last three meetings.
Mick

 

[divs4ever]

As I was itting around waiting for todays RBA rates decision, I was idle looking at the RBA website.
This chart from the RBA highlights how from an histroric perspective, the rates of tay are nothing special in that they are still lower than at any time from 1990, and if the chart had more historical data, would go back even further would show that it is less than any valueof the cash rate as far back as 1969.
View attachment 162028
Not sure why we are all whinging about rates.
Mick

back in the '60s and '70's many people were averse to debt , maybe a home mortgage , and maybe paying off a car/truck/caravan

hardly anyone in my circles even had a single credit card although some did use cheques as a sort of delayed payment

 

[wayneL]

Savers screwed again.

 

[Dona Ferentes]

Australia's unemployment rate fell 0.1 per cent in September, further raising the possibility the Reserve Bank of Australia (RBA) will increase interest rates when it meets in November.

New data from the Australian Bureau of Statistics (ABS) showed that in September, the unemployment rate fell to 3.6 per cent in seasonally adjusted terms

 

[mullokintyre]

Looks good at headline level, but when you look down into the detail, a somewhat different picture evolves.
The fall in the unemployment is almost exclusively due to a fall in the participation rate.
In other words, a lot of people have dropped out of the work force.
Oz needs to create about 20k new full time jobs per month to just take up the increase in population due to immigration and natural birth increase.
However, only 6700 jobs were created in September.
If the RBA were doing their research, these figures alone would not give the need to increase rates.
Does not mean they wont of course.
Mick

 

[eskys]

First I thought the same as Mick but the market has now decided it's not good news. Our graph has been gradually heading south since 1pm

 

[Smurf1976]

If the RBA were doing their research, these figures alone would not give the need to increase rates.

My view is central banks, globally, are going to prioritise inflation over everything else.

The era of CB's responding to every downturn is over in my view at least for the medium term. Inflation will drive rates, the stock market and employment will end up wherever they end up and once the market works that out, that's when it gets exciting real quick.

In other words, I think the market's on borrowed time here and is in for a big surprise sometime ahead. When that happens is anyone's guess - probably not now though, there's too many bears looking for a crash.

Just my thoughts, I could be wrong.

 

[mullokintyre]

Looks good at headline level, but when you look down into the detail, a somewhat different picture evolves.
The fall in the unemployment is almost exclusively due to a fall in the participation rate.
In other words, a lot of people have dropped out of the work force.
Oz needs to create about 20k new full time jobs per month to just take up the increase in population due to immigration and natural birth increase.
However, only 6700 jobs were created in September.
If the RBA were doing their research, these figures alone would not give the need to increase rates.
Does not mean they wont of course.
Mick

A little further analysis of this data ay ABS Data release
The 6700 jobs created were as a result of losing 39,900 full time jobs and gaining 46,600 part time jobs.
That is not good sign, and partly explains why the hours worked per person dropped by 0.4%.
The monthly hours worked has now fallen for every month over the last six months.
Looks suspiciously like a trend.
Mick

 

[divs4ever]

i call three in a row a trend

so i suspect you are correct

 

[mullokintyre]

A little further analysis of this data ay ABS Data release
The 6700 jobs created were as a result of losing 39,900 full time jobs and gaining 46,600 part time jobs.
That is not good sign, and partly explains why the hours worked per person dropped by 0.4%.
The monthly hours worked has now fallen for every month over the last six months.
Looks suspiciously like a trend.
Mick

Heres a visual for those who prefer to see it rather than read it.


Mick

 

[eskys]

CENTRAL BANKS​

• Powell says the US economy’s strength and continued tight labour markets could require tougher borrowing conditions to control inflation but bond markets are helping (Reuters)
• Powell suggests the Fed is inclined to hold rates steady again at its next meeting but leaves the door open to hike (Bloomberg)
• Bank of Korea keeps base rate unchanged at 3.5% as widely expected (Yonhap)
• Fed's Barr says banks in need of better stress tests to gauge shock resistance (Bloomberg)

 

[JohnDe]

RBA raises interest rates to 4.35pc, mortgage pain to come

The Reserve Bank board has lifted interest rates from 4.1 per cent to 4.35 per cent, piling further pressure on struggling mortgage holders as the central bank ramps up its battle to control stubbornly high inflation.

The latest rate hike will add $114 to the monthly interest bill on a $750,000 home loan, bringing the total increase since the RBA began hiking in May to $1815 per month, according to RateCity.

Homeowners with a mortgage of that size will have to find room for an extra $22,000 annually in family budgets which are already stretched by substantially higher cost of living.

In a statement accompanying the decision, RBA governor Michele Bullock said “the board judged an increase in interest rates was warranted today to be more assured that inflation would return to target in a reasonable time frame”.

Ms Bullock also signalled interest rates may need to climb still higher, saying “the board remains resolute in its determination to return inflation to target and will do what is necessary to achieve that outcome”.

“Whether further tightening of monetary policy is required to ensure that inflation returns to target in a reasonable time frame will depend upon the data and the evolving assessment of risks,” she said.

The RBA had held fire for four months as it waited for more information on how the previous dozen rate rises were feeding through to growth, jobs, inflation and spending.

“Inflation in Australia has passed its peak but is still too high and is proving more persistent than expected a few months ago,” Ms Bullock said.

The widely anticipated decision came after a string of data suggested the economy was proving surprisingly resilient to the dozen rate hikes already delivered since May last year, including an unemployment rate that has barely budged from near 50-year lows of 3.5 per cent.

“Since its August meeting, the board has received updated information on inflation, the labour market, economic activity and the revised set of forecasts. The weight of this information suggests that the risk of inflation remaining higher for longer has increased,” she said.

A hot consumer price report for the September quarter since the last RBA board meeting, alongside a surprise reacceleration in retail spending, had made a 13th hike virtually inevitable, economists said.

Additionally, a 10 per cent bounce in property prices since February has returned home values back to their extraordinary pandemic peaks and underlined that monetary policy was not tight enough.

More to come.

 

[The Triangle]

RBA raises interest rates to 4.35pc, mortgage pain to come

We all knew the jump was coming...

How much pressure was put on the RBA to hold rates last month when the referendum was occurring? They were probably all told to hold or their positions wouldn't be renewed.

Most voters don't understand economics or politics and most want lower not higher interest rates. Rate increases are a reflection of the current government in the public eye and an increase 30 days ago would have been bad for the "Yes" vote.

Ahh. Good to be mortgage free!

 

[divs4ever]

The RBA hikes interest rates again. But will this be the last one?​

The RBA hikes interest rates again. But will this be the last one?

425 basis points worth of rate hikes are in the can. But will there be another 25 before Christmas?

www.livewiremarkets.com

 

[eskys]

The young will be doing it tough. Some fixed loans don't expire until next year. Hope they're prepared for it.

 

[The Triangle]

The RBA hikes interest rates again. But will this be the last one?​

The RBA hikes interest rates again. But will this be the last one?

425 basis points worth of rate hikes are in the can. But will there be another 25 before Christmas?

www.livewiremarkets.com

100% no.

People are struggling yes, but we're not seeing prices come down, people selling big houses to get small houses - or really anything resembling behavior or market changes. People may not like increases but so far my view is that they are coping with them.

Every time I walk into Coles the prices are up, every time I look on the internet prices are up. IDGAF what the government says inflation is completely out of control.

 

[mullokintyre]

Ya gotta love the markets.
RBA adds a further 25 basis points to the cash rate and the AUD drops 0.8% against the USD.
Ya know it makes sense!.
Mick

 

[sptrawler]

100% no.

People are struggling yes, but we're not seeing prices come down, people selling big houses to get small houses - or really anything resembling behavior or market changes. People may not like increases but so far my view is that they are coping with them.

Every time I walk into Coles the prices are up, every time I look on the internet prices are up. IDGAF what the government says inflation is completely out of control.

+ 100%
Everytime you turn around wages are up, the cost of services are up, the cost of junk food is up and beer and smokes is up, I don't see anyone giving up any of it.
The only difference I have seen after 4 weeks away, there was a lot less traffic on the freeway on the weekend, today (a work day) it was heavy as normal.
The treasurer says it will hurt those doing it tough, I'm surprised he hasn't asked the new RBA chief to stand down.

 

[eskys]

Ya gotta love the markets.
RBA adds a further 25 basis points to the cash rate and the AUD drops 0.8% against the USD.
Ya know it makes sense!.
Mick

Can't work with logic anymore. I saw the drop in our dollar as well and went...what?/