IR Increase: initial thoughts

[Intrinsic_Value]

I was quite surprised by the RBA increase today.
Outside of the 'resource economy' the rest of the economy seems to be doing it quite tough.
Refer to recent company announcements such as Harvey Norman, Myer, Hastie, Programmed Maintenance, and look at the talk about revenue.
Even the banks are showing subdued loan growth.

This call looks very borderline in my opinion, its almost like the RBA wants to create some future ammunition (by being able to reduce rates at a future point in time, but only if it has the means to do so).

This is a 'Property Market Economics' thread, but these issues have an indirect relevance through revenue flow through the economy, which have an indirect bearing on property.

 

[pickle pickle]

I'm surprised that the RBA increase came as a shock. I was surprised they held on last month and was shocked that everyone was expecting them to be on hold this month.

The inflation numbers were lower than expected last quarter because of the 3 rises from March-May. However the RBA have been warning everyone, interest rates need to go up. They are scared about inflation, which is far enough. Stevens has shown he is terrified of inflation (heck, he increased interest rates during an election campaign).

I think this rise was the right move. I don't expect another rise till Feb (however I doubt there will be a rise then either).

I'm very negative about Australia's economic prospects. The only thing we have going for us is the prices of commidities. Everything else (IE. high dollar), is pointing for a huge slow down. If demand for commidities slows, then Australia better watch out. By the end of 2011, I expect interest rates will start falling. We got extremly lucky dodging the GFC, however our time will come.

 

[Intrinsic_Value]

, however our time will come.

on this i very much agree with you. Australia hasnt had a recession for 15+ years. Alot of dead and inneficient wood in the pipelines.

 

[RickF]

Outside of the 'resource economy' the rest of the economy seems to be doing it quite tough.
Refer to recent company announcements such as Harvey Norman, Myer, Hastie, Programmed Maintenance, and look at the talk about revenue.

Krispy Kreme! Say no more!

 

[Deltaberry]

Ah so here are the like-minded people.