What do you think the Reserve Bank will do with interest rates in Dec 04?
- Thread starter Aceyducey
- Start date
Hiya
Mug Punter says no where, flat .
If credit growth doesnt come under 10 % soon then the RBA may get a little nervous.
If CG gets below 10 % and we manage to maintain inlfation at less than 4 % I feel there may be a minor decrease in the next 6 mths or so.
ta
rolf
Mug Punter says no where, flat .
If credit growth doesnt come under 10 % soon then the RBA may get a little nervous.
If CG gets below 10 % and we manage to maintain inlfation at less than 4 % I feel there may be a minor decrease in the next 6 mths or so.
ta
rolf
I think the first rate rise will happen in Feb next year at the first RBA meeting after the Christmas credit frenzy. And that will be the first of a couple 25 point rises over calender 05.
My crystal ball working well today, just come back from a service
edit: Just for Geoff
My crystal ball working well today, just come back from a service
edit: Just for Geoff
Last edited:
Thanks to Acey for putting my request up.
I guess that makes me, the Bear however in Surry Hills , being a Bear has a very different meaning.
So I will do some research and put my case.
In principle I am voting rise as I have always believed we have another 0.5% to come and the RBA will try to get max impact.
However along this same line I also fear that should the RBA go in Dec , all the bulls will hit the airways with stories of "no more to come" which could actually have the reverse effect.
In setting rates I think the RBA is 50% results and 50% herd pyshology. Evidenced by how much pain , media, and market change we have seen since the first rise in Decemember 2003, yet it has only been 0.5% Overall.
Peter 147
I guess that makes me, the Bear however in Surry Hills , being a Bear has a very different meaning.
So I will do some research and put my case.
In principle I am voting rise as I have always believed we have another 0.5% to come and the RBA will try to get max impact.
However along this same line I also fear that should the RBA go in Dec , all the bulls will hit the airways with stories of "no more to come" which could actually have the reverse effect.
In setting rates I think the RBA is 50% results and 50% herd pyshology. Evidenced by how much pain , media, and market change we have seen since the first rise in Decemember 2003, yet it has only been 0.5% Overall.
Peter 147
MJK said:I cant see why the RBA would want max impact!
MJK
Hi MJK
From you post I deduct that you feel the economy is weak and fragile. I do not as I dont see anyone tightening their belts in the areas I live.
Now I know inner city Sydney is much wealthier than elsewhere in Aust but that is the reality.
If the economy is fragile:
Why the record car sales?
Why is the waiting list for Mercedes Benz from 3 months onwards.
Why the low unemplyment?
Why was increases by 20% in fuel not an election issue?
Why can't you get builders and trademen to work on project/renos.
Why are Rebel Sport, Harvey Norman, etc. setting new sale records?
Why is it near impossible to get reservation in Restaurants on Friday or Sat night?
I use to live in the Country so I understand this may sound like gloating but I am not. I an simpy giving a statement of the strength of spending in the big cities and thats what the RBA is worried about.
Pete 147
MJK said:
My point is the RBA acts with the market in 6 months time in mind. Re: Rates rises in December last year.
Once the elections here/US/UK wash out and Iraq is resolved to a higher level fo stablity, Oil will drop and the present risk to growth will be removed.
The RBA knows that any action takes 3 months to impact. IF they are worried about inflation/ to much growth mid 2005 they have to start acting late 2004 early 2004.
They have been provided right before when other claimed they were too hard, Peter 147
My feeling is that the RBA acts on known conditions not on predicted conditions.
They aren't looking six months ahead, they are looking at the figures 1-3 months behind.
I don't see that they have any need to anticipate the market right now.
A lot of the issues in the past caused by central banks were when they anticipated what would happen, and got it wrong.
Cheers,
Aceyducey
They aren't looking six months ahead, they are looking at the figures 1-3 months behind.
I don't see that they have any need to anticipate the market right now.
A lot of the issues in the past caused by central banks were when they anticipated what would happen, and got it wrong.
Cheers,
Aceyducey
The 'experts at HSBC' tend to think the RBA looks 12 months ahread. And these particular experts can't see any reason why it shouldn't be Dec. However, I voted for no change.
See HSBC research for the full text.
KJ
See HSBC research for the full text.
KJ
Hiya Peter
While the last rate rises were only .50 % they increased the cost of money by 8 %, in my view a not insiginificant figure. In fact for a low margin, highly geared business with high debt to equity, it could be very painful.
ta
rolf
While the last rate rises were only .50 % they increased the cost of money by 8 %, in my view a not insiginificant figure. In fact for a low margin, highly geared business with high debt to equity, it could be very painful.
ta
rolf
Because A LOT of people are getting loans easily with the low interest rate, that's why IMO. Just looking around, 10 years ago the bank wouldn't lend you anything, nowadays I've heard of plenty of people working low wages or unemployed securing big loans through various lenders.
Low unemployment? Heh skewed results. If you work for the dole I guest the government calls that "working" or if you're working part time for a few hours a week that's called "employed" too?
Low unemployment? Heh skewed results. If you work for the dole I guest the government calls that "working" or if you're working part time for a few hours a week that's called "employed" too?
Peter 147 said:
Sorry Peter,
No change this month and looks like no further change in interest rates this year.
BUT they did promise to raise rates sometime in the future....
http://www.smh.com.au/news/Business/Breathe-easier-rates-on-hold/2004/11/08/1099781299020.html
Cheers,
Aceyducey
No change this month and looks like no further change in interest rates this year.
BUT they did promise to raise rates sometime in the future....
http://www.smh.com.au/news/Business/Breathe-easier-rates-on-hold/2004/11/08/1099781299020.html
Cheers,
Aceyducey
Hi Acey
I may have to eat some humble pie. RBA seems to be all but saying all is well which is suprising. However I do note no comment at all re rates going down.
As taken form the RBA comment direct:
Inflation in Australia remains relatively low, though signs of upward pressure are now beginning to emerge in some areas. .........
In addition, despite reports of shortages of labour, aggregate wages growth remains under control at this stage. Over the past couple of years, the trend in underlying inflation has been one of gradual decline, reflecting the lagged impact of the exchange rate appreciation that took place during 2002 and 2003.
However, this trend appears now to have largely run its course, and underlying inflation is likely to start rising next year as the impact of the earlier appreciation fades. Inflation in the non-tradables sector of the economy remains relatively high, though it has eased recently as a result of a slowing in housing construction costs.
Producer price figures for the September quarter were higher than expected, with rising global commodity prices contributing significantly to upstream price increases.
Currently it is expected that underlying inflation will rise gradually to around 2½ per cent by the end of 2005 and slightly higher by mid 2006. Headline CPI inflation will remain higher than underlying measures in the coming year, reflecting the effect of higher petrol prices.
While this outlook is similar to that presented in the August Statement, it is apparent that the trough in inflation will not be as low as had been expected at the beginning of the year, when both headline and underlying measures had been forecast to decline to a trough of 1½ per cent by the end of this year. In part this upward revision has reflected the lower exchange rate prevailing over much of the period since then.
Looks to me the AUS$ is worth watching.
Peter 147
I may have to eat some humble pie.
RBA seems to be all but saying all is well which is suprising. However I do note no comment at all re rates going down.As taken form the RBA comment direct:
Inflation in Australia remains relatively low, though signs of upward pressure are now beginning to emerge in some areas. .........
In addition, despite reports of shortages of labour, aggregate wages growth remains under control at this stage. Over the past couple of years, the trend in underlying inflation has been one of gradual decline, reflecting the lagged impact of the exchange rate appreciation that took place during 2002 and 2003.
However, this trend appears now to have largely run its course, and underlying inflation is likely to start rising next year as the impact of the earlier appreciation fades. Inflation in the non-tradables sector of the economy remains relatively high, though it has eased recently as a result of a slowing in housing construction costs.
Producer price figures for the September quarter were higher than expected, with rising global commodity prices contributing significantly to upstream price increases.
Currently it is expected that underlying inflation will rise gradually to around 2½ per cent by the end of 2005 and slightly higher by mid 2006. Headline CPI inflation will remain higher than underlying measures in the coming year, reflecting the effect of higher petrol prices.
While this outlook is similar to that presented in the August Statement, it is apparent that the trough in inflation will not be as low as had been expected at the beginning of the year, when both headline and underlying measures had been forecast to decline to a trough of 1½ per cent by the end of this year. In part this upward revision has reflected the lower exchange rate prevailing over much of the period since then.
Looks to me the AUS$ is worth watching.
Peter 147
Well interest rates spend most of their time remaining stable...it'd be a bit much to expect them to start heading down right nowPeter 147 said:
As for the expectation of a lower inflation rate, oil price rises killed that! Oil's up by over 25% since the start of the year (after the recent 10% drop).
Cheers,
Aceyducey
