Willthe Reserve Bank raise interest rates?
- Thread starter Aceyducey
- Start date
Its a fifty/fifty call but I've gone the way of yes.
What a surprise I'm the only one.
Now I'm really putting myself out there. If they dont raise rates I expect I will cop a bit.
Personally I dont think its the right time to raise just yet but this article I read got me thinking just maybe?
"The RBA has long talked of its concern that too many investors have bought property, saying large returns cannot last.
However, house prices rose 18 percent in the year to June and central bank data on Friday showed credit for housing leapt 2.1 percent in September -- a 22.5 percent increase in the year and the highest level since October 1994.
"They've been jawboning it for the last 18 months or so. Eventually, if you don't start to back your rhetoric with action people know it's hollow," said National Australia's Pearson"
What a surprise I'm the only one.
Now I'm really putting myself out there. If they dont raise rates I expect I will cop a bit.
Personally I dont think its the right time to raise just yet but this article I read got me thinking just maybe?
"The RBA has long talked of its concern that too many investors have bought property, saying large returns cannot last.
However, house prices rose 18 percent in the year to June and central bank data on Friday showed credit for housing leapt 2.1 percent in September -- a 22.5 percent increase in the year and the highest level since October 1994.
"They've been jawboning it for the last 18 months or so. Eventually, if you don't start to back your rhetoric with action people know it's hollow," said National Australia's Pearson"
l voted no change.
The high aussie dollar seems to be causing a lot of concern at present to exporters and raising rates is only going to potentially drive it higher. l think they will sit on their hands for another month. They will no doubt release another press release aiming to hose down the property market.
The high aussie dollar seems to be causing a lot of concern at present to exporters and raising rates is only going to potentially drive it higher. l think they will sit on their hands for another month. They will no doubt release another press release aiming to hose down the property market.
Hi all,
I also voted no change.
I have a sneaking suspicion that there will be a few more "no change" months.
When everyone thought they were going to lower rates, they remained unchanged, the same may happen for a while on the upside.
Markets,(read market participants), like movement in markets, there is nothing as frustrating as "no change". You can make money in a bull market, you can make money in a bear market, but nothing happens in a stable market.
bye
I also voted no change.
I have a sneaking suspicion that there will be a few more "no change" months.
When everyone thought they were going to lower rates, they remained unchanged, the same may happen for a while on the upside.
Markets,(read market participants), like movement in markets, there is nothing as frustrating as "no change". You can make money in a bull market, you can make money in a bear market, but nothing happens in a stable market.
bye
The Reserve Bank follows the Hippocratic Oath - do no harm (or at least as little as possible).
I believe that raising interest rates at this time would do much more harm than good, while leaving rates as is does much less potential harm (housing prices increases are slowing anyway).
So there is no valid reason for the RB to raise rates to stave off a property bubble - that time has past & the RB by remaining calm has done much more good than harm
Cheers,
Aceyducey
I believe that raising interest rates at this time would do much more harm than good, while leaving rates as is does much less potential harm (housing prices increases are slowing anyway).
So there is no valid reason for the RB to raise rates to stave off a property bubble - that time has past & the RB by remaining calm has done much more good than harm
Cheers,
Aceyducey
B
brains
Guest
I voted for a 25 point rise this morning for no other reason than to be contrarian.
I voted for the RBA to hold rates stable.
For me, last month it may have been 90/10 in favour of no change, but this month is more like 70/30.
That is to say that the way I read the signs (IMHO) it appears to be increasingly the case that at 25 basis points rise, could easily be justified.
I am still of the view that the next change will be "up".
http://www.rba.gov.au/Statistics/cashrate_target.html
If you look at the above website you'll note that the RBA has, since mid 1997, rarely changed rates by 50 basis points (3 out of 14 times in 6 years).
However, during the period January 1990 - July 1997, all 23 changes in official interest rates were by amounts of at least 50 basis points.
MB
For me, last month it may have been 90/10 in favour of no change, but this month is more like 70/30.
That is to say that the way I read the signs (IMHO) it appears to be increasingly the case that at 25 basis points rise, could easily be justified.
I am still of the view that the next change will be "up".
http://www.rba.gov.au/Statistics/cashrate_target.html
If you look at the above website you'll note that the RBA has, since mid 1997, rarely changed rates by 50 basis points (3 out of 14 times in 6 years).
However, during the period January 1990 - July 1997, all 23 changes in official interest rates were by amounts of at least 50 basis points.
MB
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B
brains
Guest
I read the thread - tho i usually just scan them these days. What makes you think its not my personal opinion?- its just that my personal opinion is contrarian.
Its contrarian because the majority of the vote (and expert and public opinion) was voting for a no rise.
As it turns out i was right....NANANANA!!!! and whats more i fixed 70% of my loans at the absolute bottom of the curve.
Its contrarian because the majority of the vote (and expert and public opinion) was voting for a no rise.
As it turns out i was right....NANANANA!!!!
and whats more i fixed 70% of my loans at the absolute bottom of the curve.Originally posted by suggo
Brains do you read the thread before voting? What's the point of voting if it's not actually your personal opinion?
And if you were really just being contrarian shouldn't you have voted for a rate reduction!!??
Originally posted by brains
As it turns out i was right....NANANANA!!!!
Hey Brains,
I'm glad you feel that I'm the childish one
Now we can all wait to see what the effects of this are - could be very interesting!
Cheers,
Aceyducey
Unfortunately I got it right too, up .25%
Wish I was wrong more often
Oh well, I'll have to cut back on the red wine a little to cover the extra $22 a week interest. (mind you, after last night, that may not be a bad thing !)
Wish I was wrong more often
Oh well, I'll have to cut back on the red wine a little to cover the extra $22 a week interest. (mind you, after last night, that may not be a bad thing !)
B
brains
Guest
I walked right into that one
But your comments are true Acey. I think the RBA are sending a clear message that they want the property market to slow down or stop even at the expense of the Little Aussie Battler continue to rise. Interesting times ahead.
And all the debate recently about the boom or bust thingo could all be wasted bandwidth as not many people mentioned the effect of governemnt intervention on the property market. But i think a liberal government should not use the RBA as a tool to determine markets but they always do. I always thought governemnt intervention was a leftist policy.
But your comments are true Acey. I think the RBA are sending a clear message that they want the property market to slow down or stop even at the expense of the Little Aussie Battler continue to rise. Interesting times ahead.
And all the debate recently about the boom or bust thingo could all be wasted bandwidth as not many people mentioned the effect of governemnt intervention on the property market. But i think a liberal government should not use the RBA as a tool to determine markets but they always do. I always thought governemnt intervention was a leftist policy.
Originally posted by Aceyducey
Hey Brains,
I'm glad you feel that I'm the childish one
Now we can all wait to see what the effects of this are - could be very interesting!
Cheers,
Aceyducey
This is probably the main reason for the RBA's decision
to increase interest rates.
From The RBA report:
Credit outstanding is rising at around 14 per cent per year, and at over 20 per cent to households. That is a much faster rate of growth than can be expected to be consistent with economic stability over the longer run. Short periods of rapid credit growth have not typically been a major concern for monetary policy, but this growth has been sustained for some time and at present shows no sign of abating.
The 0.25% increase doesn't worry me, it stops my tenants from having funny ideas about buying their own place.....
Bill
to increase interest rates.
From The RBA report:
Credit outstanding is rising at around 14 per cent per year, and at over 20 per cent to households. That is a much faster rate of growth than can be expected to be consistent with economic stability over the longer run. Short periods of rapid credit growth have not typically been a major concern for monetary policy, but this growth has been sustained for some time and at present shows no sign of abating.
The 0.25% increase doesn't worry me, it stops my tenants from having funny ideas about buying their own place.....
Bill
Dont' you think it will kill the issues of over-supplied apartments/houses.
ToGetProperty,
I don't think a 0.25% change will kill the over-build issue (and there is no overbuilt house issue, it's just units in one or two metro areas at present).
Just remember that this change is not important for the 0.25% movement - it's important in the signal it sends regarding the RB's future plans.
No longer will the RB appear to be inactive, as it has looked for the last few years.
There is now a perceived upwards trend in interest rates in Australian (really one change isn't a trend - but perception is what counts!)
This will impact on people's perceptions of the market and their decision-making processes much more than on the reality of the situation!
NP,
Yes you gambled correctly and many of us (inc myself) gambled incorrectly. But it's simply speculation & doesn't really matter. The mark of a good investor is not how good they are at picking future events but how good they are at identifying present opportunities & managing downside risk.
Cheers,
Aceyducey
I don't think a 0.25% change will kill the over-build issue (and there is no overbuilt house issue, it's just units in one or two metro areas at present).
Just remember that this change is not important for the 0.25% movement - it's important in the signal it sends regarding the RB's future plans.
No longer will the RB appear to be inactive, as it has looked for the last few years.
There is now a perceived upwards trend in interest rates in Australian (really one change isn't a trend - but perception is what counts!)
This will impact on people's perceptions of the market and their decision-making processes much more than on the reality of the situation!
NP,
Yes you gambled correctly and many of us (inc myself) gambled incorrectly. But it's simply speculation & doesn't really matter. The mark of a good investor is not how good they are at picking future events but how good they are at identifying present opportunities & managing downside risk.
Cheers,
Aceyducey
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