Interest rate coming down?

[bez23]

RBA governor Glenn Stevens says downturn inevitable

Australia should not be foolish in thinking it is going to continue having uninterrupted economic expansion, RBA governor Glenn Stevens says, warning that a downturn would happen eventually.

Mr Stevens said the country was "building up this myth of 22 years of uninterrupted growth" and that sooner or later, there was a "probability of ... more or less 100 per cent" that a downturn would happen.

"We would be foolish to think that we have found the secret of completely eliminating the cycle, because we haven't," Mr Stevens told The Wall Street Journal.
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"But if we are sensible and prudent and just a bit lucky, we can have cyclical downturns that are not so deep. It is the deep ones that are damaging. It is the deep ones that cast a long shadow on unemployment for years after."

Mr Stevens, who together with other Reserve Bank officials has jawboned on the need for a lower exchange rate in recent weeks, declined to speak further on the Australian dollar.

He said there were reasons to be optimistic about the future, but there was a need to foster innovation and productivity.

"We have to do better on output per hour," Mr Stevens said. "You can have real income per head rising without productivity if the terms of trade keep rising. That's not going to happen now. That's finished."

He added that "as a country, we have to get it. It doesn't just land here in our lap."

The International Monetary Fund said in November that labour productivity in Australia needed to rise significantly to maintain the historical growth in living standards. The Treasury's chief economist David Gruen also warned that income growth was set to grow at a "significantly slower" pace over the next decade than in the past half a century.

Mr Stevens said in response to questions on China that Australia needed to become more aware of the full implications of the country's economic cycles.

"I think there are issues for economic policy in general there - how we manage that across the cycle, and how we think about it," Mr Stevens said of Australia's largest trading partner.

"But that's not a reason not to engage with China, because it is still enriching us. But we ought to do so in a way that recognises that the fluctuations that they experience, we will feel them."

Read more: http://www.smh.com.au/business/the-...-inevitable-20131209-2z01i.html#ixzz2n4ubB35Y

 

[BMW]

Well I guess the downturn is closer today then it was yesterday.

 

[jackbak]

I don't think you can conclude that interest rates are coming down from that article. All he is basically saying is that there will be a downturn, at some stage, in the future.

 

[VYBerlinaV8]

I don't think you can conclude that interest rates are coming down from that article. All he is basically saying is that there will be a downturn, at some stage, in the future.

+1. Interest rates are not coming down in the near future unless there's a major economic disaster.

I'd say rates won't move for at least 6 months, and then the next move will be up.

 

[Deltaberry]

I predict, the fall of the American Empire one day

All empires come to an end. Just because you've been around 400 years unscathed doesn't mean you won't fall.

 

[sash]

Downturn on its way...Victoria and SA are going to feel the pain....Holden is shutting shop....Toyota will be next. That will take about 21B out of the GDP....or 2%

 

[roe]

or interest rate could be heading up as we start to hit recession.
The reason for that we borrow a lot of money off shore and If America and

oversea economic pick up their rate goes up and there is not much RBA can do to control our commercial banks lending rate.

don't bet on interest rate move down, build your financial foundation so you can withstand either way.

 

[MTR]

Just when I thought the Au$ was falling ready to save the day.... it bounces back, the bugger is resilient.

I think RBA do not want to continue with further drops as this will impact on property market which is currently rising and cause property bubble.

Our economy I believe is in for a rough ride, time to batten the helms, protect your positions as we may end up with some rough storms ahead. Make sure you can manage your current debt and don't assume property will keep rising.

MTR

 

[TMNT]

I reckon there won't be any more rate cuts

Just steady for a while then rises

As for the eeconomy, I honestly don't know
Usually the Property market is in line withthe overall eeconomy obviously

Unemployment is ok a tad high

Mining acactivity slowing down
As for Holden closing down, I don't think it will tip the economy

Tbh the economy overall feels slightly vulnerable but the property market seems to be holding it all up
And usuaLily when the property market starts booming the rest of the economy either follows or strengthens

But are we seeing some never before happened type of situation with a shaky economy with booming Property market

 

[MTR]

For those interested, Ozforex comments on Au$/economy today:

Australian Dollar:
Whilst Greenback weakness assisted in keeping the Australian dollar above the critical 91 US Cents handle for much of yesterday?s local session consumer confidence which fell almost five percent this month to its lowest level since July did the domestic currency few favours upon release yesterday morning. Falling to a session low of 0.9045 when valued against its US Counterpart the shine which has been seen in previous months as a result of a positive election result and booming house prices does appear to be wearing off. Halting a four day gain investors have been reluctant to pick up the higher yielding asset over the past 24 hours ahead of a report today which is expected to show the official unemployment rate has risen to its highest level since 2009. Opening lower this morning the Australian dollar currently buys 90.57 US Cents