Interest Rate to remain low

[FelixL]

Nice article to explain why the interest rate is going to remain low for a while longer

http://www.smh.com.au/money/borrowing/interest-rates-to-stay-low-through-to-2015-20140412-36k3n.html

US is continue to print money via near-zero interest rates and no sign of tampering. This means RBA can't raise rates even if they fear the property market is going to bubble territory

My interpretation is that low rates means good times for property market and shares market, since term deposit / bonds earn very little

 

[investor2009]

I've thought for a long time now that alotta folks can't cope with high leverage and hikes so RBA won't be raising past a certain percentage for many years yet. Property prices are high compared to incomes so if they do raise they'll soon come back. Just like what happened from 2009. Incomes aren't going anywhere in a hurry

 

[impala67]

Super Australian dollar keeping interest rates down

http://www.theage.com.au/business/comment-and-analysis/super-australian-dollar-keeping-interest-rates-down-20140415-36o5o.html-Michael Pascoe - The Age - 15.4.14

- "There's a problem for those predicting a Reserve Bank interest rate rise sooner rather than later: the stronger Australian dollar is already doing much of the job that a rate increase would do..."

 

[FelixL]

Its unfortunate the RBA only has 1 blunt weapon for all the problems. Back in the mining boom days they had to increase rates even though it destroys the construction and manufacturing industry.

I guess law of averages comes in. This time the housing overheats while they can't raise rates to contain it

Have a feeling that RBA will actually try some other measure like imposing lenders to access loans at 3+% higher than current, limit high lvr loans etc like they have been talking about for a while