As expected, the Reserve Bank of Australia (RBA) has left the cash rate at 1.5%….
As global interest rates bottom, concerns about rising inflation and interest rates, quite naturally, come to the fore, particularly in a time where global debt (country, corporate and personal debt) are an all time high. So as investors, retirees and superannuation members, how concerned should we be? AMP’s Dr Shane Oliver gives 7 reasons to be alert, but not alarmed…
Australia continues to defy recession calls. Against this, economic growth is well below potential, with per capita growth running at just 0.8% year on year, which is below that in most major countries. So where to from here? And what will be the impact on interest rates? AMP Capital's Shane Oliver gives us his views for 2018 and beyond...
The Reserve Bank of Australia (RBA) has decided to hold the cash rate at 1.5 per cent in June, following its board meeting today.
The official cash rate will remain unchanged at 1.5 per cent as a result of today's decision by the RBA.
The decision was widely anticipated, with the futures market pricing in a 92 per cent of no change to the cash rate at the close of trading on Friday.
The RBA has opted to leave the official cash rate on hold at 1.5%.
As lenders continue with their out of cycle rate increases, at its board meeting today the Reserve Bank of Australia decided to leave the official cash rate unchanged.
This follows new data released yesterday that indicates the strong Sydney and Melbourne property markets may be close to peaking following APRA's intervention into the levels of interest only and investment lending the banks are funding.
It also appears the Reserve Bank is waiting to gauge the impact of next Tuesday's federal budget on overall economic sentiment.
As expected, the Reserve Bank of Australia decided to keep interest rates on hold at 1.5%. But according to Macquarie, we can expect two more cuts this year before economic economic conditions begin to turn around. Watch here.
A year ago the Fed raised interest rates for the first time since the GFC began. However, its initial move combined with worries about just about everything to give us a bout of share market weakness into early 2016 before investors realised that there was indeed no reason to fear the Fed after which things got back on track.
Now as widely expected we have just seen the Fed move again – raising its Federal Funds target interest rate from a range of 0.25-0.5% to the range of 0.5-0.75%, begging the question whether we will go through another bout of market ructions. However, this time around the backdrop is very different to a year ago.
This note looks at the key issues.
Happy Melbourne Cup Day!
The Reserve Bank Board met today and decided to keep official interest rates on hold at 1.5%.
The recently released September quarter inflation data confirmed that underlying inflation at 1.7% year on year was broadly in line with expectations, with fruit and vegetable price rises being offset by lower petrol prices on average. This release is probably the key determinant of the RBA's decision.
Macquarie Bank forecasts the most likely timing of further interest rate cuts to be February and May next year, as inflationary forces remain subdued.
The last RBA board meeting for 2016 will be held on Tuesday 6 December.
Next stop, US elections.
Now that the weekend's grand final sporting festivities have come to a close, I'd like to draw your attention to today's rate announcement and the thoughts on why the Reserve Bank of Australia has made this decision.
In making this call, the RBA has resisted temptation to further lower rates, opting instead to wait until the September quarter CPI data is released to allow it more time to measure the impact of the August rate cut.
For the first time in 12 months, the Reserve Bank of Australia (RBA) has announced it cut the cash rate by 25 basis points to 1.75 per cent.
The RBA's decision to cut the official interest rate comes after a surprisingly low inflation figure of 1.3 per cent year-on-year was released last Wednesday.
The ASX futures market has been pricing in a 50/50 chance of a rate cut to 1.75 per cent versus 'no change' since the release of the inflation figures.
With a target inflation rate of between 2-3 per cent, concerns about a lack of growth in the Australian economy spurred by the low Consumer Price Index readings appear to have forced the RBA's hand.
Last week's low inflation numbers had made a May rate cut likely, despite the fact that the federal budget is on the same day.
For more information, contact Rick Maggi on 9382 8885 or firstname.lastname@example.org.
Where are we headed?
The interplay between falling interest rates, the Australian dollar and housing demand is a complex one. While the RBA would dearly love to see our dollar fall, rising house prices, particularly in Sydney and Melbourne, isn't part of the script. So what happens if, as widely expected, interest rates are cut again in the coming months? Another interesting read from AMP's Dr Shane Oliver.Read more here
Rick Maggi Westmount Financial Clear Focus. Better Solutions.