With June quarter inflation data in, what do OzBargainers think of next cash rate decision.
What Will RBA Decide on Cash Rate on 6th Aug 24
Danger on 31/07/2024 - 15:39
Last edited 31/07/2024 - 16:15 by 1 other user
Last edited 31/07/2024 - 16:15 by 1 other user
Poll Options
- 54Rate hike
- 161Unchanged
- 4Rate cut
Comments
No rate rise or cut for about 9-12 months
With inflation hitting 3.8 per cent for June quarter, a rate rise is needed to bring inflation back down as per the playbook. Get it over and done with before xmas, then hopefully they can trim the rates a bit once inflation is back to normal.
Correct !
The "inflation rate" is moving up again (wrong direction).The inflation calculation is the cumulative amount of the last 4 quarters.
So this quoted inflation of 3.8% is not indicative of todays inflation.
Only how much prices have risen over the past 12 months (history)To work out the "current rate" of inflation we take last quarter's inflation of 1%, and multiply by 4, which equates to 4% current annual rate.
Furthrmore the AUD is in freefall against ALL CURRENCIES
This is the rest of the world telling the RBA and the Government that interest rates must go UP!Contrary to popular belief, the RBA is not there to protect borrowers.
Its there to manage (save) the economy and the currency.Anytime we have inflation, borrowers will always feel the pain unfortunately.
Its just one of the consequences of trying to bring inflation back down.
So those arguing that borrowers are hurting and so rates must come down, have it all WRONG!Only 1/3 of homes have mortgages.
But Everyone (100%) are affected by inflation.
Its that 100% of everyone is who the RBA is trying to help by taking action to bring down inflation.
Particularly those on low and fixed incomes who have no choice about the matter
(Borrowers have the choice to sell - likely at a profit, if they cant afford the repayments)The big question is:
Will the RBA take the much needed affirmative action now to bring down inflation and support the AUD?
OR will it sit on its hands and continue to wait and see whilst the rest of the world punishes us by selling off the AUD?If the RBA chooses to wait next week, the price of all imported goods will rise by 5-10% (imported inflation) almost immediately and that will be a smack in the face not just for the RBA but for all of us.
So those arguing that borrowers are hurting and so rates must come down, have it all WRONG!
Self interest groups making the loudest noise!
But Everyone (100%) are affected by inflation.
Correct!
Will the RBA take the much needed affirmative action now to bring down inflation and support the AUD?
As per the playbook they should, but will they? I don't think so, they'll sit on their hands another month.
As I said, do it now, so we can get the pain over before Xmas and start the new year fresh!
RBA should stop playing politics and do their job.
But then they will make Albo and Chalmers look bad, and they can't have that coming up to an election.
Which would involve what, exactly?
They'll use a new lever, start a construction company, and flood the market with cheap housing to reduce inflation! /s
Government should stop enacting policy directly in opposition to the RBA, then blaming the RBA.
100% no change
Feels like we're dying a very slow death in this country. Businesses collapsing, costs still rising, more people saying they're being laid off. The only thing keeping us going is the NDIS rort. Doesn't help that the government is importing 10,000 people per week trying to keep things going either. They should hike and put more pressure on everything but I won't be surprised if they hold, gotta protect the property ponzi scheme.
Not sure what NPC's are downvoting you, those are fairly accurate observations. Not just here of course, but the all over the western counties ATM. If they do increase the rates it would work out well for their masters at Blackrock and Vanguard who will sweep in and outbid the locals when all the mortgage defaults start piling up. You will own nothing.
Could be a few reasons why. Maybe they're ignorant and don't understand how things actually work (e.g. some people actually trusted the RBA when they said rates would remain low in 2021 even when the RBA could never forecast rates). Maybe they're offended I called out immigration because obviously it's only supply constraints that pushes up prices and definitely not demand, no there certainly is no downward-sloping demand curve on the supply and demand chart. Maybe they love this country so blindly that if anyone calls out any issues they simply can't accept it because they're living in the 80s still.
Businesses collapsing, costs still rising, more people saying they're being laid off.
every day theres a few going bust..
https://www.news.com.au/finance/business/other-industries/co…add to that, you'd be shitting flames if you had paid to have a house built with all these companies going toes up;
Wow, another one eh. Aussies really got hooked on cheap money.
add to that, you'd be shitting flames if you had paid to have a house built with all these companies going toes up;
I've been wondering how many of the construction companies that have gone bust over the past two years have phoenixed into new companies.
Fair chance there would be a few
It has been revealed that 2,300 tradesmen’s companies have gone bankrupt.
The construction sector’s financial crisis is a ‘huge problem’. Sky News’ Peta Credlin said the insolvency problem in the construction industry is “huge”, and that new ASIC statistics show insolvencies increased by over 75 percent in the past 12 months.There have been 2,349 collapsed construction firms in the last year.
https://www.nett.com.au/construction-companies-collapse-by-t…@pharkurnell: Lol "persistent shortage of workers in the Australian industry has sent tradesmen into freefall." yet we've imported hundreds of thousands of people each year and have so for the past 20 years or so yet we still have a shortage of tradies? Somehow despite our population hitting 27m (about 18 years ahead of previous forecasts) we still have a shortage of tradies somehow lol. People who run this country are absolutely corrupt.
yet we've imported hundreds of thousands of people each year and have so for the past 20 years or so
with no skills.. if you see the transport industry and the people applying for jobs its scary…
@pharkurnell: At least we can order Thai food and not need to take 10 minutes to pick it up, I guess 🤷♂️
sure wish I could cash in on the NDIS scam
It probably wouldn't be hard to get in on it. Get a couple of checks done, do a few certificates and training courses and you'll be set to become a support worker. Start charging $60 an hour to take someone to the movies.
Yes the movie went for 10hrs promise.
Or just charge people 500% more than rrp for a wheelchair or walking stick
UK Conservative party model
Of course Australia is just a decade behind the rest of the world…Property has really become a ponzi scheme around the globe.
Honestly don't know what the answer is, but immigration isn't it. We seem to be letting anyone in at the moment, what happened to australia immigration being about skilled job shortages etc?
Initially I thought property is a ponzi scheme as well fueled by greedy investors or the rich. However, after 2021/2022 covid dip, I reckon price had already formed a rather high baseline. If a property going cheap (cheaper), someone will snap it up… A friend was inspecting an underquoted house, he said he feels like he was in a flea market… So many people…
ponzi scheme as well fueled by greedy investors or the rich. However, after 2021/2022 covid dip
LOL Hardly call that a dip, it more proved how much of a ponzi scheme it is! The gov pulled out all the stops to 'save' the property market. Handed out free money to anyone, reduced rates to basically zero, forced banks to put peoples loans on pause all with no impacts to their credit rating.
Hardly a free market at play with those rules. The dip you saw was before these things kicked in, as those greedy investors aka the gov officials didn't want their property portfolio to be worthless or take a 40% dip.
So many people
Thanks to all the immigration we have, we now have more people flowing into the country each year than houses being built. Again, the need to keep the property ponzi scheme going. Without this level of demand, do you think these properties will hold these values?
The real problem with the property ponzi scheme is that houses are at crazy highs, but wages are not tracking the same. We are entering a point that the property ponzi scheme has priced out lots of people. Someone in their 20's or 30's struggles to earn/rent/save up enough to enter the market.
@JimmyF: Yeah, for sure… Most of us can read between the lines that those boomers are protecting or even increasing their wealth. Indirect corruption at best hey.
@Bargain-er: LOL While its easy for everyone to point and blame the 'boomers', they did purchased property in normal markets before the ponzi scheme was kicked off. So is it really their fault?
Who really are the ones owning all this property being rented out at top dollar creating a housing shortage, driving up prices for people who want to buy?
The real problem are people like this, none are boomers!
https://www.news.com.au/finance/real-estate/buying/western-s…
https://www.dailymail.co.uk/news/article-12418971/How-20-yea…
https://www.realestate.com.au/news/i-made-100k-in-a-year-inf…
https://www.apimagazine.com.au/news/article/electrician-s-po…
Is owning over 460 properties normal? https://www.apimagazine.com.au/news/article/a-460-property-p…
How about a MP having 40m in property? https://www.realestate.com.au/news/teal-mps-40m-property-por…
The people who get immediate benefit from risting property prices are:
1) Banks because they loan out more money on every property purchased
2) Federal government because they get more capital gains taxes on every investment property sale and more income tax from landlords as rents go up.
3) State government because they get more stamp duty on every sale and heaps more land tax as values go up
4) Local Government/Councils/water authorities because your council and water rates are based on the ever increasing land values
5) Insurance companies because higher property prises are partly a result of higher building costs. This directly affects the cost of your home insurance.Nope. Little old us dont really benefit that much at all.
It just looks like we do ON PAPER!By example, when you sell a property to buy a bigger/better one, you normally get more than you paid for the property you are selling (YES). But you are also paying much more for the property you are buying, and likely need to borrow more as well, to buy that bigger, better property.
They will either raise it, lower it, or keep the same. I guarantee it!
option 4 - abolish it
.
Raise it to reign in inflation….
But they have been raising it, and inflation is still going up.
Hence why it will likely be raised again. Its the only tool they have available to them.
They should have gone harder with the rises earlier on.
Pretty sure there was at least one occasion where it went up by 0.5%, thats a pretty big whack.
People with an average mortgage have had to find around $15,000-$20,000 a year extra just to service the mortgage since rates started increasing.
@bigbadwolf21: Bad luck. Rates were never going to stay low forever. Even the RBA said 2024 for rises back in the covid days. They'll have to cut back and/or take on extra work.
@JIMB0: Bad luck to the renters too who have copped massive rent increases from landlords to continue being able to service the loan? Or should the landlord sell and likely put the tenant back out into the rental market?
Pretty sure there was at least one occasion where it went up by 0.5%, thats a pretty big whack.
We're still behind other countries though. NZ, US, UK and Canada have rates above 5% I think. Oh wait no, Canada actually cut rates twice from a peak of 5% and is now at 4.5%.
People with an average mortgage have had to find around $15,000-$20,000 a year extra just to service the mortgage since rates started increasing.
Depends if their rate changed. There are probably still people out there who refinanced when rates were very low, e.g. ~2% and took a fixed term of 3-5 years and haven't rolled off yet. The mortgage cliff started last July but I think it's more of a sloping hill than a cliff. More pain coming IMO.
But Not enough.
Its like any medicine.
If you dont take enough its not effective enough.The RBA also moved very slowly which allowed inflation to get away
And if you take too much it could kill you or make you very sick. :)
Doesnt work.
hoping for rate increase so my HISA gets more return so i can spend more and pump inflation even higher to get more rate increases!
Rate rises dont hit those that would make a difference.
And who are they pray tell?
People who are cashed up and not beholden to a mortgage
RBA doesn't have ball to increase rate.
RBA: hold my beer…
Beers to expensive now, have to drink metho through a loaf of bread
Still waiting for big brother US fed to make a move…
The real dark horse is when the banks don't have enough cash to pay the rising interest….
Just don't go and withdraw all your money at once from the bank…
Deposits are less than borrowings. Provided the interest on loans is mostly paid, they'll be able to cover the deposits.
Have you heard of fractional banking?
Thats how banking works today.
Its a huge ponzi schemeSure - the implications of plmko's post is the banks will go tits up when they don't have the cash(flow) to pay interest on deposits, but when the banks have lent ~70% more than they have in deposits, they shouldn't have a problem covering interest on deposits. (Providing, of course, that people mostly are making the loan repayments).
As Ghost47 said, a wider issue would be if there was a run on the banks.
Yes
abolish rates and then the decision is moot
adopt leaves as the new australian currency. everyone will be immensely rich overnight!
how does a rate rise cool inflation on things like rent (a rate rise would increase rents - so does historically low building approval rates and shit loads of immigrants, but i digress), how does a rate rise stop food inflation (we all need to eat?)
Data show annual food inflation eased to 3.3 per cent in the June quarter, down from 3.8 per cent in March and the peak of 9.2 per cent in December 2022.
huh, it was up
The most significant price rises this quarter were Housing (+1.1%), Food and non-alcoholic beverages (+1.2%), Clothing and footwear (+3.1%), and Alcohol and tobacco (+1.5%).
it up but less up than last quarter.
0.5% hike
We need another rate hike but likely they'll be like "inflation will come down"
every month above 3% is another month the economy is hurt.
The RBA literally is a bunch of useless businesspeople who's only interest is to increase the supply of cheap money so their businesses can make more of it.
Our gov really has snookered us. Our money is so worthless we can't even afford to build new houses yet alone buy existing ones…I don't think RBA is doing a good job as well, esp the last RBA gov who always broke promises. However imho the main problem price won't come down is the big immigration lead by Albo. More demands less supply, price goes up.
I don't think the RBA even used the word "promise"? I think they said something along the lines of "rates will remain low for the next couple of years/foreseeable future" or something but I don't recall Lowe ever promising anyone anything and there's no way they could've kept rates low even if they wanted to. If they kept rates at 0.1% and other countries were going to 4% or 5% that would've destroyed the currency and been disastrous for the country.
The government is definitely being morons about it all, they're applying the accelerator and the RBA is applying the brakes.
You're right, he never made any promises. Unfortunately, many sections of the media reported it as if his general forecast was some kind of iron-clad promise - and then as soon as it didn't happen, skewered him for being wrong.
Did Philip Lowe not know about Russia invading Ukraine? Did the RBA not have an exact understanding of how the global economy would come out of lockdowns, and global migration would recover? What about the collapse of the (housing) construction industry? How could someone not know all of this in September 2021?
The RBA is in a no-win situation - the politicians have required that the RBA give more "guidance" as to their deliberations, but when any statement is later found incorrect everyone uses it to bash them - a standard they don't appear to apply to the rest of the financial or political opinions that regularly pontificate on the economy. If you go back to the 80's and 90's, the RBA never said anything other than announcing the new rate each month.
Magic 8 ball says try again on 6th Aug 2024