Any thoughts on today's tomorrow's (I thought it was Tuesday lol) meeting?
I'm thinking that they'll remain pig-headed until early 2025.
I'm thinking that they'll remain pig-headed until early 2025.
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RBA
- Thread starter mmm....shiney!
- Start date
RBA can’t do much atm due to AUS election…will start their claws again early next year…March I’d say
I don't buy that. The RBA is independent of the political goings on and I think they've proven that with their stubborn resistance thereby forcing governments to wield fiscal policy in order to meet concerns about the cost of living crisis.
I read an article from a couple of months ago that argues that historically the RBA lags The Fed by about 6 months. If that's the case then your March call is probably on the money. They have to act eventually because higher rates can have a negative effect on business investment, especially if we're one of the last ones to stagger home from the party.
Debt is high due to a number of factors and rates are lower than the peaks of the 70's but serviceability has to enter the equation and unlike many other nations the nature of our housing credit market means that Australians are impacted by central bank policy rates to a higher degree than most other advanced nations.
High levels of debt is not necessarily a problem, in the same way that low levels of debt is not necessarily a good thing.
Source: https://www.macrobusiness.com.au/2024/05/rba-deals-massive-increase-in-mortgage-payments/
The RBA is creating more problems than it is solving.
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A simplified explanation of the way I see it post-Covid:
i used to believe that too...based on past elections, rates stayed during the poll period..
Except there's no election in sight and the RBA and Treasury are at odds with each other policy wise.
RBA thinking energy rebates etc are "one off" payments, pundits in the media thinking that they're going to be a permanent fixture going forward (Feds just papering over the cracks they've created). If it is permanent then the RBA has no choice but to backflip and deliver rate cuts.
Nothing is free.
Looking at rates on their own without clouding the debate with debt and we see that when compared to what is happening around the world in economies doing both better and worse than us, rates are too high. Far too high. And the margins now are measured in basis points, not whole % changes.
Let's compare Oz with the US (the strongest economy in the world), and NZ (a bit of a basket case lately).
GDP. US Q2 GDP was 3%. Aus was 0.2% and NZ was -0.2%. The US has cut rates into an economy growing at 2 - 3% per qtr, NZ has cut rates into an economy declining at near to sub-zero rates, the RBA has held rates into an economy that is flatlining just above 0%. If our economy was growing like the US then a case could be mounted for keeping rates on hold, but it's not.
Wages growth. The US has cut rates into an economy with wages growing at or around 7%/QTR, NZ has cut rates into an economy with wages growing just under 4%/QTR, the RBA has held rates into an economy with wages growing at just over 4%. If wages were growing at a rate comparable to the US then a case could be made for keeping rates on hold, but they're not.
The RBA is increasingly an outlier amongst world central banks.
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I'm not sure what the "true" inflation figures are so I can't comment on whether that guides their thinking or not.
Edit to add: I'm actually wondering whether they are fulfilling their mandate as opposed to being obsessed with inflation. I must admit I haven't read any minutes of meetings for a long time nor do I read much when Bullock is in the news so I couldn't say whether she is willing to sacrifice "the economic prosperity and welfare" of Australians in pursuit of crushing inflation. I'll admit to being a long term critic of the RBA though.
Edit to add: I'm actually wondering whether they are fulfilling their mandate as opposed to being obsessed with inflation. I must admit I haven't read any minutes of meetings for a long time nor do I read much when Bullock is in the news so I couldn't say whether she is willing to sacrifice "the economic prosperity and welfare" of Australians in pursuit of crushing inflation. I'll admit to being a long term critic of the RBA though.
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precious roar
Active Member
Maybe the RBA knows our inflation rate figures are complete BS and are instead looking at the true inflation rate in OZ which is much higher?
People are stuck with either thinking the RBA is BS or our current way of calculating inflation is BS...
...or that both are BS.
We can only play what's in front of us.
Rate cut Feb?
Real $ Return
Well-Known Member
Your quess is good as anyones...theyve almost declared victory and got down to accepted "official" numbers and goal of 2-3%. Dont see many people celebrating but for some reason especially those asset poor as theyre getting crushed
mybullion.com.au
Well-Known Member
Powell just paused, which makes it more likely RBA will too.
Either way, just keep on stackin
Either way, just keep on stackin
Isn’t rate decision now made by 2 panels? Fiona herself and another set of ppl assigned by the federal govt? I betFiona wants to HOLD and the other wants CUT… to MAKE Albo GREAT AGAIN!
I’d say no CUT.
I’d say no CUT.