RBA Feb 2015 announcement - no change

[Peter_Tersteeg]

The RBA has left rates as they are for this month.

Personally I think this is a good thing. There hasn't really been enough time for the effects of last months cut to flow through and take effect in the greater economy.

Last months cut has appeared to spur the property market up, which has created some speculation about the Melbourne and Sydney markets heading for bubble territory. Another rate cut would not have helped this situation.

As much as I personally like a rate cut for my own mortgages, I dare say the RBA has made the correct decision for the time being.

 

[D.T.]

Good call in my opinion and mostly expected.

 

[Redom]

The RBA has left rates as they are for this month.

Personally I think this is a good thing. There hasn't really been enough time for the effects of last months cut to flow through and take effect in the greater economy.

Last months cut has appeared to spur the property market up, which has created some speculation about the Melbourne and Sydney markets heading for bubble territory. Another rate cut would not have helped this situation.

As much as I personally like a rate cut for my own mortgages, I dare say the RBA has made the correct decision for the time being.

Reading the announcement - the next rate cut is imminent. The easing bias is obvious, but the strength of wording seemed pretty clear to me.

I dare say the discussion was centred around whether cutting this month or in coming months was best, but more on this will become available in the middle of the month when the minutes are released.

I said this last time there was a rate cut - there are larger considerations at play than the housing market. Those larger considerations point to an obvious need for some stimulus, or there'll be softer inflation and continued weakness in labour markets.

The RBA sets monetary policy for all sectors of the economy, not for property investors. What's happening in property is obviously one consideration, but there are other tools to address these concerns. You can clearly see in the statement and minutes that there is an increased focus on what the other regulators (APRA) are doing.

Cheers,
Redom

 

[sash]

Myt thoughts are 50% chance of rate cut in April and 100% in May if the April one does not go ahead.

The there is a 50% chance there will be another one in Aug/Sep. At that point the govt will need to worry about overheated markets on the East Coast!

 

[BayView]

Bring it on.

Combined with the last one, another .25 will be half a gorilla per month saving for me.

yeeeeeeeeeeeeeeeeeeeeeeeeeeeehaaaaaaaaaaaaaaaaaa

 

[MTR]

Could go either way in Aug, I think growth was lower than expected, Au$ at around 77, I think RBA want it at around 72, I want it at 60

Interesting times

 

[greedy2000]

the asx actually has a index that tracks the markets expectations of a rate movement.

the link is here http://www.asx.com.au/prices/targetratetracker.htm

if you want to put your money where your mouth is, sportsbet lets you bet on the interest rate decision. I scored a cheeky $100 the other day...

 

[Aaron Sice]

People still not looking past the end of the table.

US talking seriously about bringing rates off zero.

That would solve a lot of the RBA's problems in one hit - makes you realise just how insignificant their rate changes made here or there is, in the grand scheme of things.

 

[aussieB]

Although I don't fully grasp the role a falling AUD is playing, it sure is making things difficult for a few. The fuel prices are up. The grocery prices have gone up. The vendors selling stuff procured internationally have increased their prices. All citing the lower value of the Aussie Dollar. The boss doesn't want to adjust salary for CPI. Other than a few segments of the market, I wonder if anyone at the grass root level is really benefiting.

 

[Aaron Sice]

Oil at 52 and AUD @ 75 - reminiscent of 1998ish when fuel was 75c a litre.

Just saying.

 

[KangaBanga]

U.S. FED is now expected to increase interest rates in JUNE as jobs reports over there released this week was really good.

Wall street took a hit overnight. Emerging currencies and AUD will probably take a big hit as funds are channeled back to US.

global interest rates will likely go up now rather than down further.

 

[KangaBanga]

Although I don't fully grasp the role a falling AUD is playing, it sure is making things difficult for a few. The fuel prices are up. The grocery prices have gone up. The vendors selling stuff procured internationally have increased their prices. All citing the lower value of the Aussie Dollar. The boss doesn't want to adjust salary for CPI. Other than a few segments of the market, I wonder if anyone at the grass root level is really benefiting.

What you observe is exactly what is going on. Lower dollar will result in increased prices for imported goods and makes everything more expensive. Well oil is supposed to be cheap, <$1/L at servo but the refinery strikes in the states are keeping prices of refined oil up, even though crude price is low. But this is just temporary, once the strikes over pump prices will plummet again.

Only benefits of a weakening AUD are to the tourist and export sectors. Unfortunately commodity prices are crashing, manufacturing has been contracting and a lot moved offshore due to previously high AUD, and the tourism sector will unlikely make up for it.

Basically increasing real estate prices and investment is the only thing really driving the AUssie economy at the moment. Once that falls apart its likely to be recession time.

 

[rizzle]

Markets are now expecting the next rate cut in April: http://www.asx.com.au/data/trt/ib_expectation_curve_graph.pdf