Interest Rate Update

Declining Housing MarketReserve Bank Board meetings will be pretty dull over the course of 2017 as all indicators are pointing to stable interest rates over the rest of the year. look at this comment from 10 months ago by the then Governor Glen Stevens,

“Recent data confirm that inflation remains quite low. Given very subdued growth in labour costs and very low cost pressures elsewhere in the world, this is expected to remain the case for some time.” Continue reading

Interest Rate Update

Declining Housing MarketAt its meeting today, the Board decided to lower the cash rate by 25 basis points to 1.50 per cent, effective 3 August 2016. I have got to say that this move has surprised me. Even with low inflation, a slowing housing sector and moderate growth, the Reserve Bank is not left with much monetary stimulus for any future global shocks. In one of his last statements as the outgoing Governor Glen Steven said,

“Recent data confirm that inflation remains quite low. Given very subdued growth in labour costs and very low cost pressures elsewhere in the world, this is expected to remain the case for some time.” Continue reading

Interest Rate Update

Declining Housing MarketIn the latest interest rate update, the Reserve Bank Board decided to cut official cash rates by 0.25% to 1.75% at this months policy meeting. This was the first interest rate adjustment since May 2015 where rates were cut to 2%. In his statement accompanying the release Governor Glen Steven expressed the same concern facing all Central Bankers around the world, low interest rates and sluggish growth,

“While several advanced economies have recorded improved conditions over the past year, conditions have become more difficult for a number of emerging market economies.” Continue reading

Interest Rate Update

Declining Housing MarketIn the latest interest rate update, the Reserve Bank Board decided to leave official cash rates at 2.0% at this weeks monetary policy meeting. In his statement accompanying the release Governor Glen Steven flagged the uncertainty in global markets and the slow down in global growth ,

“the global economy is continuing to grow, though at a slightly lower pace than earlier expected.” Continue reading

Interest Rate Update

Declining Housing MarketThe Reserve Bank Board decided to leave official cash rates at 2.0% at todays monetary policy meeting. In his statement accompanying the release Governor Glen Steven said,

“In Australia, the available information suggests that the economy has continued to grow over the past year, but at a rate somewhat below its longer-term average. In such circumstances, monetary policy needs to be accommodative.” Continue reading

Interest Rate Update

Declining Housing MarketOn the day when RP-Data announced house prices rose 3.5% across capital cities, with Sydney prices growing 4.4%, the Reserve Bank Board maintained a wait and see approach to domestic interest rates.

In announcing the official cash rate unchanged at 2.5%, the Governor Glen Stevens said, “Financial conditions overall remain very accommodative.” He went on in the release to to say that “On present indications, the most prudent course is likely to be a period of stability in interest rates.”
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Interest Rate Update

Still on our way to 4.99%

Declining Housing MarketSome months ago we flagged our expectation that home loan rates were on their way to 4.99%. Since then the Reserve Bank has delivered 3 cuts to the official cash rate and we now sit at 3%. By the way this is the same level that the central bank moved rates to during the darkest day’s of the GFC. So where to from here?

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