RBA rates on hold
- Thread starter Bradsdad
- Start date
Text of the STATEMENT BY GLENN STEVENS here
Most commentators interpret it as no more cuts are on the table, regardless of unemployment levels, or removal of FHB stimulus.
The market is now places a high probability of a 0.25% increase within 4 months, with a small possibility of a raise within 2 months. And a full 2% of increases within 18 months.
Most commentators interpret it as no more cuts are on the table, regardless of unemployment levels, or removal of FHB stimulus.
The market is now places a high probability of a 0.25% increase within 4 months, with a small possibility of a raise within 2 months. And a full 2% of increases within 18 months.
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we would surely be in the midst of a serious boom for this to occur.
This must be labelled 'the recession we never had'.
The experts make me so angry... in '07 we were bombarded with the boom that would never end, resources depletion, china blah blah. Then it was the greatest depression ever, despite not entering a recession yet. now IRs are set to sky rocket and the world is on fire again.
how is one suppose to make long term investment decisions with so much over reactionary BS?
Throw a dart at the wall as to how much rates will *actually* rise in the next 18 months. There are too many unknowns right now.
The expected rate expectation curve has been wrong before, may be wrong again. Most economists are saying below average growth globally for the next few years. Then again, they're often wrong too.
One of the large reasons our dollar is so high is the interest rate differentiation between Australia and the rest of the world. Up the rates (higher) than everybody else does and the dollar will only rise further, which the RBA actively tries to prevent.
The expected rate expectation curve has been wrong before, may be wrong again. Most economists are saying below average growth globally for the next few years. Then again, they're often wrong too.
One of the large reasons our dollar is so high is the interest rate differentiation between Australia and the rest of the world. Up the rates (higher) than everybody else does and the dollar will only rise further, which the RBA actively tries to prevent.
This is part of the reason why I like to make a series of short-term investment decisions, instead
(and, I guess, a big part of the reason why I don't rely too much on the media)
Not really... back to around 5% could be considered neutral. 24 months ago we had 7.25% which still didn't really slow the economy much. We're currently at generational low IRs based on the view in Q4 of an likely imminent financial abyss. That is no longer the case, so +2% is may well be justified to get it back to neutral.
ha
.
but i've seen the cash rates at 4point-something not 8 years ago.
how is this a "generationally low" scenario?
much like the "Recession" we're currently in?
how is this a "generationally low" scenario?
much like the "Recession" we're currently in?
Ausprop,
I am of the same frame of mind sometimes. I know what you are saying and when I do my own research I tend to come up with conflicting information. Are there any REAL experts?
Alot of the time it is mostly media and when you read the same headlines for so long you actually start BELIEVING it! The good thing is: the more people that believe there is a BOOM coming, the sooner they will all rush out and buy property!
We didn't have a recession.
I will be suprised if rates don't rise before the end of the year.
Regards JO
Not to be an attack on the possibility of heavy rate rises, however I think it is important to see how volatile the implied yield curve can be.
Here is the chart from only 3 weeks or so ago.. There were actually expectations of a rate cut, and rates nearly 1% lower than is indicated in the latest yield curve at the same November 2010 period.
If there is any deterioration noted on the expected recovery in the next couple of months, I am sure it may look quite different again.
Here is the chart from only 3 weeks or so ago.. There were actually expectations of a rate cut, and rates nearly 1% lower than is indicated in the latest yield curve at the same November 2010 period.
If there is any deterioration noted on the expected recovery in the next couple of months, I am sure it may look quite different again.
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how about we do away with all the projections and crystal balling and focus on how you can PROFIT form a rate rise?
This is the overnight cash rate set by the RBA
Bank Rates : std variable, discounted variable, 3 year fixed
them's some fancy lines
i meant not the actual rates, but the implied yield, same as above
i'm interested to see what market was predicting, compared to what actually happened
can't go back that far, but I have been tracking the asx guesses for a bit, below.
credit suisse like to have a punt as well. if you dig around you might find their archives.
Just to illustrate what gwk is pointing out regarding volatility....
On 4th August the yield curve looked like this
Then we had much stronger than expected employment figures.
And as a result by 6th August the yield curve had changed....
The curve has shifted a little to the left, and moved a little higher. This shows that the market thinks that rate hikes have a higher probability of coming a little sooner & rising a little higher.
The difference between the 2 curves, shows that the bond market changes it's mind when the facts change.
As Keynes said When the facts change, I change my mind. What do you do, sir?
And after todays RBA speech it's v. likely that the yield curve will change again. There's a possibility that the RBA will increase their growth forecasts & reduce their peak unemployment forecast, and maybe even inflation.
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Maybe not on hold for too much longer:
RBA Statement on Monetary Policy
And some related coverage:
Reserve Bank outlines case for raising interest rates
Cheers,
Michael
RBA Statement on Monetary Policy
RBA said:
And some related coverage:
Reserve Bank outlines case for raising interest rates
Cheers,
Michael
