Interest rate cut by RBA in September?

Another interest rate cut on the horizon?
No doubt this will be a hotly debated question over the next few weeks. According to the NAB (via their Market Weekly Report) the RBA will consider another cut in interest rates in coming months unless the currency falls dramatically or activity rebounds strongly. They back this up due to a lack of confidence in the labour market (indicated by a fall in full time employment and a high rate of unemployment). To read more see http://business.nab.com.au/category/business-topics/
At the same time, it is worth mentioning that there are just as many commentators predicting the RBA will hold firm. It will be interesting to see what the outcome is.
We think it would be highly unlikely to see another cut during the election campaign. Whilst it is not unusual for the RBA to cut rates during an election campaign, it would certainly be controversial. From our perspective – we can’t seem to get enough land to sell, and the market is roaring along. This is partly due to the supply equation way behind demand.
Thus we believe rates will stay firm in September.
See below a chart showing interest rates from 1990 to present

RBA

Posted in General News, Uncategorized on 14th August, 2013 | No Comments »

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