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Hello Ben Kingsley here with the RBA announcement just released.
Cash rate remained on hold at 2.5%.
The RBA will also release the minutes of the meeting which will give
us a further indication
in terms of how they're looking and what sort of position they are taking in
terms of rates.
Right now though I think the settings are about right. We saw this week the
release of inflationary data
and they are now higher than expected so those people who are looking
or the commentators who are thinking we might see one or two more rate cuts
coming through,
that's not necessarily going to be in play. The overlying inflation number
was 0.8 for the December quarter
and the underlying inflation number was 0.9, again, higher than expected.
The over the year average would now looking at around
2.7 and 2.6 respectively in terms of
that underlying and overlying inflation number. And that's within the RBA range,
So the settings are about appropriate for now. Interestingly, over the last twelve
months we've seen the Australian dollar
depreciate around 15 percent. That's great news for the Australian economy
because obviously in terms of the actual overall GDP
the trend in economic activity is below par or below that
two-and-a-half to three 3 percent which is where that's sweet spot is for our
economic growth
and prosperity. So right now what does that mean for you?
What does it mean for you in terms of what you want to do with your home loan?
Well, right now I'll be keeping rates as the variable rate is good
and then starting to think about fixing maybe some of that rate
because what we could see in the second half of this year for the very very
first time
we actually could see the talk over rate rise.
If we see really strong price activity in the housing sector where we're seeing
strong growth in values,
then the RBA will be forced to move and bring up the rates.
But I still believe that we will see no rate rise
unless that occurs because they've got the challenge around the dollar, if they
pull the rates up it's
going to put pressure on the dollar, pressure on exports and our overall GDP
performance.
So it's an interesting time. It's a time to sit down and have a conversation with
one of our advisors
to see what's right for your circumstances. Money is very very cheap
historically.
It hasn't been this good for a long time. Do we wanna lock a bit of that money away
and take a hedge position
or do we want to keep riding it out, that's a conversation that we would love to have
with you.
So make sure you talk to one about advisors and that's the wrap for the RBA
decision for this month.