I'm not alone in reading the very strong job market results this month as a good indication of economic strength and as heightening the risk of RBA rate increases sooner rather than later.
A variety of opinion is good Michael. As long as we can all keep backing it rationally with reasonable data/stats.
The sheep were bleating for years that Roubini and Schiller were idiots.
Let's consider the decision the RBA has to take.
What happens if they raise rates, say, twice this year?
Will the banks care? Haven't they done things in their own sweet way for the last 6 mths.
Might the RBA have to be even more cautious than usual considering the first home owners bonus/boost is being wound back.
Where's the advantage in the RBA increasing rates if retail turnover and credit card debt are still falling, and housing finance takes a hit when the terminated fhb bb's knock sales?
And what would it say about Rudd's economic managment, if the RBA was to come in and lift rates before the fhb stimulus ended? If I was the Coalition, I'd go to town on Rudd over that......for Rudd reaching so recklessly into future tax revenue to so overstimulate the economy as to force the RBA to reach into the tax payer's pocket and pull out cash in the form of higher rates. So the taxpayer cops it from both ends. What a ridiculous situation.
If the RBA raise rates this year, my view is it will have less to do with property prices, and more to do with continuing to attract foreign investment in public and private debt, at a time when the whole world is in an unprecedented competition for capital.
)
