Interest Rates: What will the Reserve Bank do? (02/04)

[Aceyducey]

Where do you think interest rates will go in February and why?

60% of voters got it right in December....

http://www.somersoft.com/forums/showthread.php?s=&threadid=13096&highlight=Interest+rates


Cheers,

Aceyducey

 

[Puppeteer]

I think another 0.25% will be in the pipeline, and I think it will be the last rise for a while. If it doesn't happen this time around, then it will next time (unless the currency continues to climb above 80c)

I think they still want to see the housing market slow, and the consumer credit over christmas isn't what they wanted to see.

On the other hand, farmers are starting to do it tough, as well as other export industry, and they won't want to make things much tougher for them.

 

[Aceyducey]

Originally posted by Puppeteer
I think another 0.25% will be in the pipeline, and I think it will be the last rise for a while. If it doesn't happen this time around, then it will next time (unless the currency continues to climb above 80c)

With the dollar above US77.3c today & based on it's current velocity we could see it above US80c by next week...

Cheers,

Aceyducey

 

[willair]

ill take the punt on 0.50%next time, and thats with optimism
but the aussie dollars will go above .85 us next month..
watch the banks on the ASX.
good luck
willair

 

[BV]

Willair

What's your reasoning for your +0.5% prediction?

I voted for no change but could see a small increase coming (0.25%?) if the RBA STILL want to neutralise (as they call it)
our rates

I think that this time around they will seriously consider the current and future damage to the housing, construction, manufacturing and farming industries.

 

[BUNDY]

I think they'll hold this time and see what happens. I think they need to take stock of the past couple of months. The last 2 increases have included the Christmas period. People generally try to pull their belts in after spending so much over Christmas.

If spending continues it's upward trend, we may see another .25% nest time.

Cheers
BUNDY

 

[willair]

BV,
Its just a gut feeling i have,i wish i could give you good reasoning
but with property and other investments i like to think always different,win or lose it what i choose..
good luck..
willair..

 

[Mondie]

l agree with most of the others, l think they will hold this month with the potential to bump them up 0.25% in the coming months if the market shows signs of picking up where it left of. The two small rises late last year seemed to have a big impact, going on what l have read, and some agents comments.

 

[perky29]

I am hoping for no change....but I do not think that will happen - so I voted for .25% rise again.
I am starting to get a bit worried about what the RBA does. If it does 50 basis points over the next 3 to 6 months the aussie $ is going to go a lot higher than now - and before we know it the economy will slow down with all the other ramifications that come with that (and Mark Latham will be voted in - oh god no )
I just hope the RBA does not go too far.

 

[Brenda Irwin]

I think the RBA won't just close the lid on the IP genie....

They'll nail the lid shut with a .25% increase or 3.

 

[landlubber]

Is this how it goes ? With every interest rate rise...the more potential owner occupiers ( 1st home buyers etc) are prevented from entering the market, more stay as tenants/become tenants ...high IP prices , low yields and rising interest rates hinder new IP investors ....demand increases ...supply decreases ...rents increase !

Might not be all bad !!

LL

 

[BV]

LL

So you see it as a win-win situation?
You could be right you know...

 

[Bill.L]

Hi all,

I have been one of those that was wrong with both the rises, but I'll have another stab at no change.
This time there is more evidence to support the no-change line, such as lower dwelling approval nos, lower advertised job vacancies and rising bank share prices!

bye

 

[Aceyducey]

Originally posted by Bill.L
I have been one of those that was wrong with both the rises, but I'll have another stab at no change.

Sooner or later you'll get it right Bill!



Cheers,

Aceyducey

 

[spark]

I think they'll hold, waiting for Europe and the US to start raising theirs, not to be much out of line with other Western economies.

BTW, it's not so much that the AUD went up, it's the USD that fell back to where it historically "belongs". The AUD had strenghtened only ~10% vs the Euro.
Look at some charts here

PS - I would prefer to be wrong.

 

[landlubber]

Spark ......Aren't we already way out-a-line with the others ? ...the "long term" differential with the US cash rate is 2%, and we're already at 4.25% ( USA are at 1.00% and have clearly signalled they ain't going nowhere soon) ....USA is finally starting to realise that China is "kicking butt" economically speaking ...heard on the TV recently that US factory jobs ( read "manufacturing") declined for the 41st consecutive month ! Japan has cash rates of zero last time I looked .

BV ... Don't know about "win-win" . Just trying to use logic.
We've had wonderful capital gains, and yields have gone to "heck"...now price growth has (generally) slowed ...unemployment is low , economy is (currently) strong ....that should lead to wage increases which will mean tenants will be able to pay higher rents ??? Happy to debate the theory if anybody is interested.

Keep thinking,
LL

 

[MarkB]

The RBA Board doesn't have to make a decision until Tuesday 3 February - so I won't vote until that time either.

I have said in other posts that I believe that "aside from another 1/2 - 3/4 of a percent or so that we are probably getting close to the top of this interest rate cycle and that rates will either plateau or fall again slightly in the next 6-18 months."

I still believe this to be the case (based on information to hand as at 12.06 pm, AEDT on Thursday 15 January 2004).

MB

(Standard economists disclaimer - you know... all care but no responsibility)

 

[Aceyducey]

Pitt_St - you have to vote BEFORE the RB makes the decision though

I've set the poll to end a few days beforehand.

Cheers,

Aceyducey

 

[Ecogirl]

gut feel - up 0.25% just for something a little different after xmas.....

and by august (when i an buy my next IP) they will have steadied at a higher rate and decline after i get my loan........murphy's law
ecogirl

 

[OPM-addict]

+0.5% .....said the gut

I would take a stab at it.

My gut says 0.5% increase. My head says 0.25% increase and my calculator says look at that beautiful IP, I just want to buy ...sigh.

The RBA next decision will determine my choice this year on what and when to buy this year.

Given the dollar is going strong against most major currencies, Germany is still in recession, America leadership is trying to win a second term and China/Japan grabbing all our mineral exports it can. All this equals a fun and interesting 2004.

What will happen to the Aussie dollar if they dont raise interest rates ?

Respect, Peace, Out.

OPM-addict