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RBA cash rate

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The RBA surprised markets with their decision yet again, seems like not many were expecting the cash rate to be lifted 0.5%.

Perhaps 50bps rate hikes are becoming the new norm with major central banks, in which case both AUD and the ASX200 may potentially be in for some repricing building up to the July meeting.
 
good luck on THAT ( history has been unkind there )

however variable mortgages ( and such ) i am betting most will be lifted by Friday evening
 
logic says the RBA will 'round ' the interest rates sooner rather than later , the canary MIGHT be house prices/sales , if the housing market cools a little , the RBA MIGHT lift off the pedal a little next month to only raise TO 1%

but realistically it still needs to be at least 3% by Xmas ( to look like it is trying )
 

you owe your partner a beer or two
 
Well, will Albo fire Lowe now?
He got the predictions systemically wrong since he took over.
Between the the Financial Wizards at the RBA and the Financial Wizards at treasurey, we F@#@#^ed.
Their forecasts are less than worthless.
Mick
 
mullokintyre said:
Well, will Albo fire Lowe now?
He got the predictions systemically wrong since he took over.
Between the the Financial Wizards at the RBA and the Financial Wizards at treasurey, we F@#@#^ed.
Their forecasts are less than worthless.
Mick
Click to expand...
probably not , some would argue the RBA 'gifted' the ALP a win by raising during an election campaign , and is now giving a belated appearance of action , if getting things habitually wrong was a sin , half the civil servants would be gone ( in DOZENS of departments , not just the RBA and Treasury )

and sacking all those career public servants would be fatal for the ALP

the QUESTION is do this public servants know the truth , but lie to fit the government agenda , or are they all incapable of seeing the truth in their analysis ( remembering most belong to the Keynesian school of economics and some are fans of MMT aka they have been educated to think this way )

but worthless , yes , much of the time, but employing them boosts union membership and make the unemployment figures look better
 
and PS many data collection parameters are rigged and have been so in a progressively twisted manner since at least 1990 ... so garbage in equals ..... ( one of my deceased relatives worked in the Federal public service for several decades but also transferred often between departments .. and brought some of the memos , and other paperwork home )
 
Well if Lowe wanted to "gift" the ALP a win, he would have done a couple of rates increases well before he did.
We could have had rates with a 2 in front of them by the time the election was called if he had the cajones.
The ALP may have got 85 seats and control of the senate.
Mick
 
maybe , but the Sco-Mo narrative was we were all fine

now of course the RBA might have realized it HAD TO raise last month or face complete irrelevance , not that there are many RBA faithful here
 
Some really interesting insight from the ABS on the recent CPI numbers.

You can see the biggest driver of our CPI is the increase in transportation, which is up 13.7% over the PCP. This is followed by a 6.7% increase in housing on the PCP. Now I'm no economist, but I can see how the RBA rate hikes can dampen the growth in housing, but think that rate hikes will have minimal impact on bringing down transportation, which I assume is up because of the global supply chain disruptions. I can see how rate hikes will also have an impact on killing off consumer sentiment which in turn may wind back the more discretionary CPI segments such as recreation and culture and alcohol and tobacco segments


So I understand that the ABS does not consider existing built houses when calculating the housing segment for CPI--they only look and new builds and exclude land costs. But below shows a PCP increase in building a new house is almost a record levels and approaching the levels of 20 years ago. If this excludes land cost and only new buildings then my thinking is that the recent big increase is probably down to the increase in building material costs and the shortage of building labor and their increasing fees. Will be interesting to see the impact that rising interest rates will have on this segment.



The ABS also factors in rents for the housing CPI segment. Some what surprising to me is that PCP rents in Sydney and Melbourne have gone backwards with relatively modest MoM increase. It is the rents in the other capital cities that have grown dramatically over the past year and is what appears to be driving the CPI increase--not Melbourne and Sydney. I'm not entirely sure how interest rate hikes with bring this under control.



As I mentioned earlier, transportation costs are risen dramatically and no doubt is is largely down to the increase in fuel costs. Interesting to note that we are back to the record levels set 30 years ago with the invasion of Kuwait by Iraq. Can't see the RBA interest rate rises bringing this under control any time soon.

 
The 50 BPS interest rate rise was the first time in 20 years that the RBA has done a 50 BPS rise (they have done a few 50BPS cuts, but that is another matter).
Its also almost 20 years there was any kind of rate rise.
So there must be a lot of home buyers out there who have never had the sticker shock of a rate rise.
Will be interesting to see what happens with spending.
Mick
 
100%…whole generation of home owners out there who have never experienced high interest rates and have only experienced rate reductions. Interesting times ahead for sure.
 
am expecting the low end of the market ( first home buyers and buy to live in folks ) to fade first

the top of the market should hold for a while as those with CASH will buy up the good value houses ( at the top end , and solid rent-earners )

renos will be the sector to watch NORMALLY these should fade less however this time shortages are already here , fittings , workers , tradesmen and finance will be tougher , and 'waiting it out ' might turn into a doom spiral

watch out for unusual twists
 
I read the following from a commentator in the dreaded murdoch press.
Back in the olden days, when banks sourced much of their capital from overseas markets, the banks were at the mercy of off shore investors.
But now with so much money from Superannuation, the banks will do very nicely still paying less than 0.7% on their so called high interest accounts, but being able to pass on the full increases to home lender customers.
Watch how quickly their interest rate margins start to climb.

Mick
 
mullokintyre said:
I read the following from a commentator in the dreaded murdoch press.
Back in the olden days, when banks sourced much of their capital from overseas markets, the banks were at the mercy of off shore investors.
Click to expand...


but will that off-shore borrowing return , and how much is still borrowed ( i suspect SOME , but not as much as 'olden days ' )

for example i stopped looking at bank-hybrids after i found an interesting explanation of bank's tier 1 capital , now sure i was only putting in a few thousand here and a few thousand there ( dollars not hybrids ) but are there more like me seeing not enough reward for the risk taken in these bank hybrids

what happens when local buyers resist buying in bulk , relying on steady demand from super funds might be a BIG trap , if jobs start disappearing
 
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