It looks like a 0.25% Melbourne Cup rate rise is on the way. This will take official interest rates to 4.35%.
The quarterly inflation outcome of 1.2%, a few weeks ago, has seemingly condemned the RBA to raising interest rates again. Inflation is falling but it’s just not falling fast enough or in the way the RBA wants it to.
Reserve Bank governor Michele Bullock has maintained that the central bank has a “low tolerance” for price pressures to stay higher for longer.
How can inflation properly fall when unemployment is still close to record lows at 3.7%? This is driving wages higher and property prices are almost at record highs keeping rents elevated.
It also doesn’t help that Coles, Woolies, Qantas and many other corporations are gouging their way to incredible corporate profits. I wish the RBA could do something about this as it would certainly help in their inflation fight.
If the RBA is going to hike interest rates, it makes sense that they do it this November. Hiking in December avoids the RBA putting a dampener on Christmas and waiting until February 2024 as the next RBA board meeting is too far away.
It will be interesting to see how the economy shakes out in 2024. Higher interest rates have made borrowing much harder in both residential and commercial settings. You would have to think this will eventually have an impact on the economy and in turn inflation.
Interest rate rise on the day of the horses
It looks like a 0.25% Melbourne Cup rate rise is on the way. This will take official interest rates to 4.35%.
The quarterly inflation outcome of 1.2%, a few weeks ago, has seemingly condemned the RBA to raising interest rates again. Inflation is falling but it’s just not falling fast enough or in the way the RBA wants it to.
Reserve Bank governor Michele Bullock has maintained that the central bank has a “low tolerance” for price pressures to stay higher for longer.
How can inflation properly fall when unemployment is still close to record lows at 3.7%? This is driving wages higher and property prices are almost at record highs keeping rents elevated.
It also doesn’t help that Coles, Woolies, Qantas and many other corporations are gouging their way to incredible corporate profits. I wish the RBA could do something about this as it would certainly help in their inflation fight.
If the RBA is going to hike interest rates, it makes sense that they do it this November. Hiking in December avoids the RBA putting a dampener on Christmas and waiting until February 2024 as the next RBA board meeting is too far away.
It will be interesting to see how the economy shakes out in 2024. Higher interest rates have made borrowing much harder in both residential and commercial settings. You would have to think this will eventually have an impact on the economy and in turn inflation.
Let’s see
by Boris Sfiligoi
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