interest rate increases - a different question...

TheCamel

• 2nd Nov, 2007

• #1

There's plenty of threads around on whether rates are going to go up or down etc, and we've all got an opinion on it i'm sure.

However - here's a new one.

Do you think the RBA will raise rates by MORE than a quarter of a percent ?

(has this ever happened historically ? I can probably go check it out on their site, but i'm just curious)

edit - historically, yes, it has risen by an entire percent several times in the past.. as well as half a percent, and it's also dropped by half a percent.. there's also been a few 3/4 percent changes..

 

F

FHB

• 2nd Nov, 2007

• #2

All through the 90s they did raise by more than .25 points, but with debt being higher and pass through of increases more effective they will probably just increase by .25 more often.

The forecast for inflation is looking scarey though, so they may use a couple of .5 increases to put more pressure on the breaks. It would unsettle the local markets a little I would think....

 

TheCamel

• 2nd Nov, 2007

• #3

if it was up to me, i'd do a .5% increase purely to say "well, you people haven't listened so far, so now it's really going to hurt"

and in 6 months, pull it back again maybe..

but then, i know nothign about economics..

 

MarkB

• 2nd Nov, 2007

• #4

TheCamel said:

but then, i know nothign about economics..

Click to expand...

Don't let that stop you from expressing a point of view, or maybe even sending out a newsletter.

It doesn't seem to stop others.

M

 

evand

• 2nd Nov, 2007

• #5

When interest rates are in the vicinity of 15% - 18%. A quarter % rise doesnt have the same effect as it would when rates are say 5% - 8%. Thats my take on it.

In the late 80s - 90s half a percent or more rise/fall was pretty much always the go.

 

BoatBoy

• 2nd Nov, 2007

• #6

Australian Home Loan Interest Rates from 1959 - 2005.

http://www.loansense.com.au/historical-rates.html

I was talking to Bloss this morning about .5% possibilities, so just signed off on the ballance of our loans locked in for 5 years.

Figure if it goes up and comes back in that timeframe, it possibly still won't be any better than todays rate.


Dave

 

steveadl

• 2nd Nov, 2007

• #7

I know they can, but I can't see them raising it more than .25% per time. Would cause too much panic amongst the huddled masses.

 

M

Mofra

• 3rd Nov, 2007

• #8

steveadl said:

I know they can, but I can't see them raising it more than .25% per time. Would cause too much panic amongst the huddled masses.

Click to expand...

Given the overseas markets at the moment, there is yet to be many convincing arguments that rates will continue to rise beyond mid-2008.
The handing back of union power could offer us a disproportionate wage spike which could trigger a further rise or two, however the likelyhood of recession in the US is growing and the knock-on effects to small economies like Australia have yet to be tested in the current environment.

 

Y

yieldmatters

• 3rd Nov, 2007

• #9

They can be small increments now as Australians are carrying so much more debt than they used to. So I continue to see .25% rises but if they truly get spooked I suppose they could go .5% but it wouldn't be common.

 

F

FHB

• 3rd Nov, 2007

• #10

I'm guessing that the RBA would be more inclined to go for two consecutive months of .25 rises rather than a .5 rise in one hit...

 

A

aspect

• 4th Nov, 2007

• #11

Well I am hoping for 3 consecutive raises. That should dampen prices enough to allow me to use existing equity to buy some cheap diamonds in the rough in time for them drop 'em and ride the next boom!

 

BayView

• 4th Nov, 2007

• #12

steveadl said:

I know they can, but I can't see them raising it more than .25% per time. Would cause too much panic amongst the huddled masses.

Click to expand...

huddled masses is too many keystrokes Steve.
Just use the word "sheep".