With the recent increase in the official cash rate to 3.85% I'm looking to hear your thoughts as to weather you agree with Philip lowe and the reserve bank for being aggressive with interest rates to stifle inflation, or perhaps you feel they are out of touch with the average Aussie?
I'm interested in public perception.
You are best to read the statement from the RBA to get the complete picture
The RBA have never been correct at forecasting other than by chance.
Could replace them with a random number generator and get similar results. Or maybe GPT4 to get superior results.
Rates should be 7% - they are far too low atm.
Why should they be 7%?
Poll seems to indicate a good job done by the RBA. Hope this puts an end to these types of threads now.
It won't. These recent (pseudo) polls are deliberate seeds to sow dissent and division. The 'tear it down' cohort are growing number as per the "Overrated States of America" .
Victoria (particularly) is an incubator for these wrecking ball, mental pygmies .
Australia has some very serious and dangerous social malaise just around the corner. Interest rates won't make a lick of difference.
What else are they meant to do? And housing bubble decades in the making is a factor in the inflation we are seeing, so of course they are going to react to it as a factor.
If raising interest rates doesn't work, which most evidence shows it doesn't, then the government needs to think of something else to do.
Housing price just increased over all. goes to show how much equity Australians still have from the 70% increase in their property price over the past 10 yrs.
Attended a few auctions last month, just for fun. Properties were selling 20-30% above the indicative sell price. I do not think they underquoted, the quoted price was in line with what similar ones were sold in December-January.
One month without an increase in interest rate brought the fear of missing out. People do have a lot of cash to spare. Hence I think more to be done to bring inflation down…..
Up up up please 👏🏿
6 to 7% increase.
Interest rates are really not going to solve inflation. With all the government spending and trash financial policies that is the main culprit. Covid handouts/ submarine deals, foot shooting sanctions.
Pretty sure there are loads of cashed up aussies/boomers that will be positively engorged by the idea of further rate rises and won’t be slowing down on their spending.
The pain felt by young home owners is only a minority. Majority of home owners I’d say own their places outright and don’t give a damn.
Majority of home owners I’d say own their places outright and don’t give a damn.
I really don't think this is true. Do you have any figures?
"In the past two decades, from 1999–00 to 2019–20, the percentage of Australian households that own their own home:
With or without a mortgage decreased from 71% to 66%.
Without a mortgage decreased from 39% to 30%.
With a mortgage increased from 32% to 37%."
So less than half of home owners would not have a mortgage if the above is still true.
Source: ABS (https://www.abs.gov.au/statistics/people/housing/housing-occ…)
On an related note where is ubank announcement to increase interest rate for their savings account? Have RBA broken ubank with this rate rise lol
The problem is slightly more of the country's mortgagees are still on fixed rate mortgages with super low rates. When those mortgages revert to variable rates their spending will stop and inflation will drop through the floor. Then they'll have to start dropping rates in a hurry.
When those mortgages revert to variable rates their spending will stop and inflation will drop through the floor.
This is assuming that those people are still out there spending it up on luxury items. The problem is that they're not. Their spending has had to increase simply buying groceries and essential items, and they can't just cut back on those things.
This is assuming that those people are still out there spending it up on luxury items. The problem is that they're not.
While that may be true of some people (like me for example) earnings at other retailers (JB, HN etc) have seen a huge increase in sales/revenue, JB for example saw total earnings up 14% for the half - I think it could be argued that the majority of what JB sells would be considered "luxury" items. Heck even I've just bought a laptop (to do TAFE this year and next) and a new mobile phone (to replace a 3.5 year old one on its last legs).
Even overseas economists are putting inflation down to corporate greed.
RBA issued enormous amounts of NEW money at zero cost and lent it out at interest to the banking system who lends it to us. That causes inflation. Get it?
They cause it, then wind up rates claiming to be helping us but profiting Pretty much everything else is all a show.
Read carefully. Learn about M1 and M3:
https://www.rba.gov.au/statistics/tables/xls/d03hist.xlsx?v=…
To anyone who thinks the RBA is doing a good job I invite you to look at these charts.
https://tradingeconomics.com/japan/interest-rate
https://tradingeconomics.com/japan/inflation-cpi
The RBA is incompetent - the high inflation has nothing to do with the cash rate. They could make the cash rate 30% -
It's not going to change the climate disasters nuking our food, its not going to stop the floodings, its not going to impact the oil cartel's price fixing, its not going to undo our corrupt energy agreements, its not going to undo supply shortages.
What it will do is increase domestic violence, homelessness and crime. It will create a larger wealth gap between rich and poor. It will end up ruining Australia further.
There's no time machine that can undo the stupidity of ever going below 3% cash rate in the past when it absolutely wasn't necessary. They cornered themselves and are using a sledge hammer to break everything except what they actually need broken.
Watch as they cause a recession and knee jerk next year to going under 3% again.
I wont even go into the covid printing, I think its already been covered by several people. All I'll say is "independent central bank" my ass.
Would have been good if you also showed the Japanese GDP growth rate https://tradingeconomics.com/japan/gdp-growth
Yep. It's comparable with Australia's https://tradingeconomics.com/australia/gdp-growth
The difference is they haven't put themselves in further debt to keep growth up. They've learned their lesson.
We have mountains of debt and nothing to show for it other than 'we we paid a lot of money to delay covid deaths'
https://www.spectator.co.uk/article/sweden-covid-and-excess-…
So what's the solution? too much drivel here.
You've provided all of these complex problems that ultimately are personal problems.
DV? That happens if you're rich or poor, personal issue.
Homelessness? Australia has one of the best opportunities of socioeconomic mobility in the world.
Crime? Happens everywhere, again it's a personal issue.
Edited. Forget it.
I don't care enough, the countries going to shit regardless of opinions.
lol check what is US inflation rate now ? and it all happened thanks to continuous interest rate rise nothing else… while we here had pause for no reason and all it did was increased property prices to sky high and not affordable… !
i know many who owns 3 to 4 property and all they doing for last 4 year was keep buying at high prices as they only pay interest and get tenant to pay the remaining mortgage …and all those has no choice but to sell in next six month so good on RBA to keep increasing rate and it should be 6% not 3.85% …. to stop capitalist greedy property pumpers .. !
Lol after all this you know prices are still gonna be expensive. The only way to bring cost of living down is if inflation became negative. Right now it's on 7% inflation even if it goes down to 2% it's still shit. It just means that your $5 carrot becomes more expensive slower. Inflation has to go like -5% to be sustainable or wages go up by 10%. Since wages have probably gone up $2 an hour in the past 5 years.
As somebody looking to get into the housing market with a fair wad of cash I’m happy with the rate rises, but the RBA are a bunch of idiots. Pushed the interest rates too low for way too long, which was exacerbated because they were worried about the appearance of propriety before the elections. If they’re so independent why couldn’t they raise rates before the election?
Rates have been too low for too long we've been accustomed to it…. realistically they should be way higher than what it currently is. I feel like they've been too lenient on the cash rate increases.. but you know gotta think about the poor guy who overleveraged on a million dollar loan :(
Where's the option for "i've just read all 150 comments and I still don't have a clue if they've done a good job or not."?
As a lay person it doesn't seem they're doing a good job, but I have heard Tim Reardon (Chief Economist for the Housing Industry of Australia) state that trying to slow or stop inflation with interest rate rises is about as effective as sticking your hand out the window to slow down your car.
Pretty huge bias Tim has. Lower interest rates mean more building, which I imagine is what he really cares about.
wheres the option to state 'RBA not been aggressive enough'?
Not the way I expected the poll to go, that's for sure.
Personally I think they've done a terrible job with all these raises, for a few reasons.
A huge portion of mortgages were/are still fixed, meaning the repayments haven't gone up. The RBA raises the rate then goes "oh no, inflation is still high!?!? Raise again!" when the reality is that the rate raise has had no effect because of the fixed mortgages, therefor raising it again isn't going to make inflation go down either.
When those fixed rate mortgages end, people are going to suddenly have their repayments double, or worse, overnight. This is going to cause massive amounts of people to lose their homes………..and inflation is still going to be high.
It's not the people that interest rate rises affect that are causing the massive inflation in the first place. The people causing the inflation are the rich that got aburdly richer during COVID just splashing all their new extra money. They're not going to stop spending with interest rate rises because they don't care about interest rate rises. In fact the higher interest rates will likely help them because of the interest they'll earn on their fat stacks of cash in the bank.
Basically the RBA are trying to hurt the rich by hurting everyone else. It shouldn't be a surprise that it's not working. Most people have already cut back their spending massively because of all the price rises in essentials. The ones that haven't are the rich people who couldn't even tell you how much a loaf of bread costs, and even a 10% interest rate isn't going to curb their spending, but it damn well will ruin everyone else.
This is going to cause massive amounts of people to lose their homes…
I'm pretty sure this is what Albo's intent is…
You will own nothing and be happy..
You have to be aggressive with your home loan if that's your problem. If I didn't proactively seek out different banks to reduce my interest rates or cash back, I would be almost 3% higher than my current rate and less than $7k less cash back. It's the people who are lazy that will end up paying more.
So about 7-10 hours of my time, saved me $300 a month on repayments + $480 on interest + $7k.
RBA should be .75% ahead of where it is at
to all the people who bought house they cant afford at 7%-8% with a good buffer, tough shit, inflation cant wait for you
RBA can only do so much within the current system, which is flawed.
Inflation is normally brought about by demand side growth, which can be 'cooled' by raising interest rates. Fine.
But current inflationary pressure is being brought upon us all by SUPPLY SIDE constraints. Raising interest rates does nothing for that… people need to eat and need to heat.
If there's big issues with supply, it's government policy that needs to address that. LNP dropped the ball, and we are still playing catch up to fix it all.
someone 'troll' or 'gutsy point out' me rba rate should be about 10% if the rba mugs wish to fix inflation back to 2-3% with current mythology they implemented. else rba mugs are just thick head cluelessly floating around or need change realistic inflation target and look at models from non western value countries whom doing very well manage inflation.
OK job. They didn't raise rates sooner. Hence just ok.
LOL 3.85% cash rate and the politicians cry murder.
Many people loaded up like crazy with the low rates and promises of no rises. People that would normally not do that, and now the rug has been pulled big time.
As long as fat twts like Clive that got even fatter in the past years exist you should not accept any responsibility in curbing the inflation
The correct answer here is that the RBA have lifted rates too late and too slowly. Inflation will ruin everything and they're more worried about keeping the property Ponzi pumped.
Have fun staying poor.
They are doing a terrible job.
People understand that as rates go up so does unemployment right?
Now have a think and answer that again.
I think it's time the public was better educated (school curriculum) on our economic history so more bright minds are informed to bring the economic innovation we need for the future.
how about teaching family law, personal finance .. most important things in life considering your selection of your partner accounts for 90% of your happiness
Personal finance is taught extensively and comprehensively… take a look at the Australian Curriculum and see for yourself! Family law? Maybe… I’d say more relationship skills etc. Church used to do a lot of that for society.
RBA- the group of people who caused this inflation problem with 0% cash rates and endless money printing. Now they intend for us to pay for their mistakes. Philip Lowe has some apologising to do.
So you got a great benefit before .. this just balances things out
Which part of 'too good to be true' did all those who over extended, think was not a useful indicator?
It's a mess alright, but for people to think the global impacts don't apply to us ,is delusion.
Don't worry Straya, the font of all wisdom, Angry Angus Taylor, will save the day.
If I was the govt I'd sack Lowe and give Taylor the job.
Kill 2 birds with one stone
People with a mortgage will say No.
Renters will say Yes.
Outright owners are Indifferent.
Not good for renters if landlord has overborrowed potentially?
renters just need to pay market rate or move
well, they didn't increase interest rate last month and now they are increasing which shows they are doing bad job… as should have raised interest rate long time back and reduced inflation by USA… !
they procrastinating interest rate rise thinking inflation will go away on it's own.. lol
Property prices going up and any stopping at interest rate will only bite back big time… in long-run.. !
Im baffled by the use of property prices as a inflation metric. Prices took a nose dive 9 odd months ago. Did that factor into inflation then? I see nothing to suggest so. Now prices have risen "in some area" and now its a metric for inflation? My area has taken a good 50-100k hit in the last 12 months with no sign of recovering back to those levels any time soon. How can something that is only effecting pockets of the public be used as a inflation measuring tool? Not to mention that only a small % of the public is actively buying and selling at any one time. I see the same with interest rates. Only 1/3 of the population has a mortgage, so how does raising interest rates stop the other 2/3'rds spending? Rents arent rising at the same level as mortgages. Same again for the use of fuel as a inflation metric. It was blamed in part for the rise in inflation the last reporting period. Petrol prices rise and fall on a monthly basis. On average, petrol is cheaper now than what it was when this all began 12 odd months ago. I just dont get how the use of these items works in measuring inflation? Am I missing something?
What you missing is that economy don't work in isolation of entire world… ! US kept increasing the interest rates and their inflation is 4.8% as of last reporting while so called economics expert in RBA stopped interest in between and also did not extend the level it was done in USA … and the results are that we are suffering from 7% inflation… !
What RBA should have done today was accept their past actions and increase rate by atleast 0.75% if not more… !
Those who voted above for RBA doing good job out of touch and have no idea how bad the inflation going to impact lower income household.. !
They shafted savers for over a decade and no one cried foul. Why all the sympathy for borrowers?
I think the big issue the RBA has, is that know they cant tame this current bout of inflation by simply jacking up interest rates. But they have no other means to deal with it. What else exactly do they have in their arsenal to control inflation?
My problem is that i just dont understand their reasoning behind the current increase. They flagged batter than expected employment and rising housing prices. I mean how do they measure healthy employment figures as being an overall factor causing inflation to sit high? And im more confused by how any rise in current housing prices can be considered inflation when prices have dropped by a good 10% in many areas. Is that a consideration when it comes to inflation? Or do they only ever consider prices going up and not down?