RBA makes cash rate call amid wild speculation

Following much debate about when the RBA would exit its easing policies, the central bank has held the cash rate at a record-low 0.1 of a percentage point for another month.

Speculation is running wild about interest rates rising before the RBA’s long time ‘deadline’ of 2024 and the RBA appears to be inching into that debate.

Towards the end of last month, RBA assistant governor for economics Luci Ellis reiterated the central bank’s position of “supporting monetary conditions”, noting that the pandemic is not over and that Australia still has a long way to go to achieve an inflation rate of 2–3 per cent.



RBA makes cash rate call amid wild speculation - Smart Property Investment

 

AFR reports it a bit differently though:

ASX down; RBA holds rates, tweaks bond buying

The RBA said it would retain the April 2024 bond as the bond for the yield target and retain the target of 10 basis points.

and

The central bank also announced it would maintain the cash rate at 0.1 per cent and also keep its yield curve target on the three-year bond yield at 0.1 per cent.

and finally:

The RBA also maintained its central scenario that the conditions precedent for a rate rise would not be met before 2024.

So, it looks like RBA is still committed to keep the cash rate low and has reiterated that rate rise is very unlikely until 2024.

 

The 3yr will start rising then.

With TFF not extended and only targeting upto Apr 2024 you'll see fixed rates start to climb (3yr fixed,4yr fixed).

 

CBA stating 2022

Throw a dart
CBA predicts interest rate hike in late-2022

 

CBA was the only bank out of the Big 4 to say that but then they also mentioned in the same commentary that IR rise will peak to 1.15% cash rate, so it's even better if they are to peak at that rate.

However 2 weeks is eternity in these volatile times - I expect CBA now walking back from that forecast and in-line with other major banks and RBA's announcement today re-forecast the rise to happen 2023/ 2024.

I am looking forward to Bill Evans presentation tomorrow and his commentary - he will have plenty to say on this.

 

Yes this will be good.

Honestly, who knows what will happen???? So much conflicting info on this subject. Though It would not surprise me if interest rates start rising in 2022

Also lots of talk there will be intervention from APRA? I doubt it.

I guess Just have to watch and wait to see how this unfolds

 

The RBA has been lowering rates for years, a pandemic or local economy has nothing to do with it.
Does make a good excuse though.

Maybe they want people to fix rates.
They were saying rates are going up at 12.5% and 6%.

 

For those interested, interview with Dr Shane Oliver, AMP


Interview: Shane Oliver on the RBA, interest rates, house prices & lockdowns - Fear And Greed - Omny.fm

His predicting interest rate rise 2023.

He also is surprised that lending has not tightened yet, expects this to happen

 

Shane Oliver is the Chief Economist and Head of Investment Strategy for AMP.
Surprised allright....and clueless


I'll never forget telling a friend to sell AMP at $22... they kept insisting it was gonna be help for retirement.

He's the classic case of decades of continious wealth distruction on a grand scale and being very well paid for it.

 

What's AMP share price got to do with Shane Oliver?