The Spectre of
Rising Interest Rates

Interest rates still to rise
The Reserve Bank of Australia (RBA) is not seeing the Australian flood disasters as having a prolonged effect upon the national economy.

It certainly expects the March quarter GDP to decline by 0.5%. But it is then projecting a 4.25% surge, over the remainder of this year. [Read more…]

Why November?

Most people seemed taken by surprise, when the RBA chose to raise the cash rate to 4.75% on Cup Day this week.

However, with Oaks Day being held yesterday, I thought today would be better timing for this post.

Price Pressures

Price Pressures

Sure, the September quarter CPI had fallen to within the RBA’s target range. And yes, there is still some uncertainty overseas.

However, with industry facing capacity constraints and the mining boom heading towards previous levels … inflation is poised to accelerate during the December quarter, as wages start to rise.
[Read more…]

Was the RBA Asleep at the Wheel?

In fact, the RBA has been cautious … NOT asleep!

Last week, we covered the statistical anomaly relating to Australia’s low unemployment figure. And that may well have influenced the RBA in holding rates steady last month.

Although, the patchy spending in December and January probably coloured their thinking as well.

Bursting Bubbles

Bursting Bubbles


Nonetheless, you continue to see a surge in home values; and headline inflation is now starting to creep up again. [Read more…]