Rate cut next month?

0.50% is my prediction.
How low CAN they go? Look at Japan, Sweden, Denmark etc Negative Interest Rates

 

go to zero if that doesn't work goes negative like Germany and the US until it works

 

The US Fed never cut below zero. They used QE instead.

Look at the US now, they are the strongest 1st world major economy, with low unemployment to boot. I can't give much credit to Obama or Trump. I only give credit to the Fed.

 

Dec 2008 Fed rate is 0.25% effectively zero
Saver was offered negative rate to keep money in the banks

They keep that going from 2008-2015
Recession end affectively 1 year in 2009 after they hit 0.25% and saver get hit with negative rate

You want to park money in risk free Germany 10 years bond now you get hit with -0.3% approaching -0.4%

 

Price of bonds is inversely proportional to Yield (interest). If you keep holding the bonds and expect the yields to fall further, you can actually make a good Capital Gain. Plus, it's "risk-free" as you said. It's a good speculative play.

 

22 Trillion dollars in debt ... Also their economic data has been pretty sluggish. I don't think they are doing well

 

but the people with properties portfolio with crappy yield and debt 10 times their earning and properties going up are doing well yeah - ?

It is all relative it is what it is, prepared yourself but make sure you find a way to profit on both upside and downside, the reasons don’t matter and the state of the economy don’t matter, find the edge to profit in all market.

 

Sugar high from trillion dollar tax cuts is settling back, getting closer to actually fund those cuts...

I chuckle at all the recent tirades about trade imbalance and all... given their biggest exports is USD (petro dollar) which they can print willy-nilly.

 

ASX is doing really well,
So much money is being shifted chasing yield.

 

I'm expecting the cut in September then another cut in February 2019 and as @Waterboy mentioned the US Fed will drop rates also shortly

 

That's why "saving money" is probably the worst financial decision in this current and prolonged low-rate environment.

 

Am I now the Rates Oracle?

 

Are we still going to have another rate cut by Nov? Or by Oct?
Or is it Feb 2020

 

The market is fully-pricing a rate cut in Feb '20.

https://www.asx.com.au/data/trt/ib_expectation_curve_graph.pdf

 

I believe a rate cut by November then another in early next year taking RBA down to 0.50%

 

US Fed Chair Powell testified in Congress last night that a rate cut is coming.

AUD strengthening is not a good thing for the RBA and it may well be forced to cut all the way to Zero in the global race to the bottom!

 

Depends what the economy does...I think the RBA will take a few months to observe the effect of the last two cuts done in a very short period of time.

If the housing market reverses, and by all early indications that has already happened...then the RBA may well hold until 2020 before taking further action.

Likely any future rate cuts wouldn't be passed on hardly at all either, protecting bank profitability. RBA knows this, hence begging government to take more action, as they know the affect of interest rate changes will get smaller and smaller.

 

RBA to cut cash rate to 0.75% in October & to 0.50% in February

Bill Evans, July 24, 2019

"We are bringing forward the timing of our forecast for the next cut in the overnight cash rate by the RBA from November to October.

By October, we expect that the path of the unemployment rate will be sufficiently contrary to the RBA’s plans that they will have appropriate justification to ease policy a little earlier than we had previously expected.

We recognise that September is also likely to be a “live” meeting but expect the Board will wait for more data, such as the June quarter national accounts, before moving again.

We are also revising down our terminal rate forecast from the 0.75% we forecast on May 24 to 0.50%. We expect the move from 0.75% to 0.50% to occur in February next year."

Read more: https://westpaciq.westpac.com.au/wibiqauthoring/_uploads/file/Australia/2019/July/er20190724BullRBACashRate.pdf

 

Is that because the September and feb gdp figures will finally show that we are officially in recession?

 

Please read the article. It's about unemployment. We're not going to have a recession!