RBA - Wespac tip two interest rate cuts in 2019

What do you think.... economy slowing down

If it happens ??? will banks pass this on??

https://www.smh.com.au/business/the...is-year-as-economy-slows-20190221-p50zdd.html

 

As a guy who runs an enterprise business I would say that business stable and hiring is hard in Melbourne and Sydney currently.

I’m not sold on slowing economy. I also think retail numbers will decline even in a boom. Look for “experience numbers” to go up. Travel. Concerts, etc. this will be a long term trend as we enter the post materialistic era.

 

do you mind sharing which industry you're invested in?

they say employment lags the business cycle.

 

The best way would be saying - I work in business to business.

Not business to consumer.

Across almost all verticals.

 

I believe Bill Evans has called interest rates pretty spot on the last few years and im expecting RBA to drop rates based on what im seeing and hearing around

 

It will be interesting to see if they get passed on

The cynic in me says they will pass on half to existing customers and offer full for new customers

 

Ditto

 

The cynic in me says a 1/3rd stays with the bank that no one sees, 1/3rd to existing customers, and 2/3rds if you're a new customer

 

The cynic in me said the have no goddam clue. They change their forecasts like I change my socks.

 

Edited

 

No one knows for sure.

 

If they pass the full discount to new customers that'd be great. Need another silly season and an extra 50k on those 600k fhb loans! It's been too long since the last boom.

 

Interest rates set to be slashed as jobless rate rises, banks warn - ABC News (Australian Broadcasting Corporation)

"But official data released yesterday shows Australia's construction sector has not only hit the brakes, it has moved sharply into reverse, and with that comes the potential for mass job losses."

"We're tracking construction job advertisements at the moment and they're suggesting that in the next six months or so we could see around 50,000 job losses,"

Also on the retail front:

"We're looking at quite a slowdown in consumer spending, that's going to weigh on employment in retailing. You're probably looking at least another 50,000 or so [job losses], but it's very hard to put a precise number on it.

 

Thanks for posting the link above. It makes a lot of sense. Tour around Sydney and it feels like a city in construction (both public sector infrastructure and housing). If that housing construction goes off a cliff (which makes sense given the price cycle), I can see a whole lot of jobs going which will need to be absorbed but will likely take some time to do so.

Not sure how it plays out in terms of housing market impact:
- Price of debt falls, incentivising loads of borrowers to adjust risk levels and leverage up
- Housing supply falls off a cliff for a couple of years (not a good planning outcome)
- Economy softens though and some people are left behind
- Confidence impact associated with a slowing economy

 

The big worry with a slowdown in the housing construction industry is that state governments might remove all grants for FHB buying established property and only allow it for new builds ,as a measure for creating jobs if unemployment becomes a big issue..
Can cause big problems for investors trying to sell established homes.

 

NG on new builds only will probably give a bit of boost as well

 

I think it can only go down and they should act before the end of this financial year. I just received a letter that my variable rate has increased.

 

Established homes are usually a bit cheaper . New and shiny are bit more expensive. Sometimes alot.

Alot will go for cheaper to buy established.?

 

but the next buyer of that won't NG so its value may not go up as much.

 

I bet not, the bank shareholder will also need to maintain its share price and execs bonuses.
hence it will not be passed on .