Hiya all,
Just a quick quiz, when do people think the ARB will lift rates.
I have it on good source that the first hike may be in 9 -12 months ( 0.25% ARB ), however I’m interested in the ” burst bubble “, ie rates going in double figures. My source says it’s 36 – 42 months away, anyone have any theories [?]
Michael
just beI would say that there are no compelling signs for any rate changes. So the question becomes: “When is something going to happen that may cause the RBA to change rates?”
Who knows? Have you got a crystal ball?
There are lots of people that forecast the result of the RBA’s next meeting – many are wrong. So if they can’t forecast 1 month ahead then how good will they be forecasting 1 – 2 years into the future?
I put interest rate forecasters and fortune tellers in the same box.
Cheers
Stu
[
]So what you are saying Stu is that you have no idea if rates will stay as they are for the next 20 years ! [?]
What I’m trying to invite to all is, do people think all will be as good as it gets for some time or will EVENTUALLY some thing happen.
I prefer to NOT use a crystal ball either, however I am interested in direction .
By the way, there ARE persons out there that know maybe even construct these POSSIBLE changes. [
]You can’t solve a problem with the same kind of thinking that created it.
Imagination is more important than knowledge. (A.Einstein)Michael
just beWere it not for the craziness in real estate, the government would like interest rates to go DOWN, to assist with other economic figures. However, I think treasury only gets one seat on the RBA committee. I also read that current rates are not that low, it’s just that inflation is, if you look at the historical margin between interest rates and the CPI.
Local factors aside, when will the US economy start to expand? Bush is introducing tax cuts to boost it. Historically, I’ve read that this has worked well in the past.
I’m sure we all expect interst rates to rise eventually. But when? I read one report suggesting the ARB already wanted to raise rates, but other economic pressures precluded them from doing so. I’d be surprised if rates rose in the very short term, and surprised if they didn’t within 12 months.
Wen rates do rise, I just hope it is very gradually and very gently. With so many people exposed to so much debt the potential consequences of significant increases are huge.
Hey Michael
I personally believe that in the next 5-7 months we will see our first rate increase. i think just last month the US has had their first month where they hav had a small ammount of growth in their economy…..
Keep track of what the banks do with their fixed rates, just this monday Members Equity has increased some or at least 1 of its fixed rates.. could this be a sign of whats to come???
But as others hav said… u pretty much need a crystal ball lol
Cheers
Jason
PS i very much doubt that rates will go into double figures any time soon if ever, the public backlash from first home buyers and anyone else thats got a mortgage will be huge… just my thought i guess
With gov. searching for $$$$ so they / our country can be ” secure “, would it not be a good strategy from the gov. perspective to find this extra revenue through what may be seen as a win / win situation for them.
My apologise for putting politics in this discussion, but The secret of life is that there is no secret of life.
Please feel free to express yourself, No problem can withstand the assault of sustained thinking.
Michael
just beToday’s record low unemployment rate is an indication of the direction of interests rate and that is up. If we continue to get more good economic news, my guess is that we’ll get 0.25 increase within the next 3 months.
[
]Now this is what I call brainstorming, come on guys !
Bring it on
What about fixed interest rate in othe countries Jason, US is very inconsistant. [?]
Michael
just beAn article in the Financial Review is predicting the RBA will increase rates sooner rather than later based on all the good economic news and the lowering unemployment rate further fuelling the housing market. It says raising rates is a win win. Past history says it will deflate housing prices where jawboning has failed and if the economy slows a bit too much or world growth comes off it can then cut them again.
In the UK house prices are predicted to fall 10% next year and 15% they year after. I don’t know on what basis these claims are made though.
Hi all
there are some people out there who try to make a living out of predicting where interest rates are heading. look hback over the past2 months , 2 years you will see these guy’s consistantly get it wrong. i wouldn’t make an investment desision based on what economists are predicting. Next set of data out they will change their mind again.
some very good commments so far i’d like to add
Europe is in Economic trouble look at the largest European economy Germany they are going backwards
USA dispite some apparent good news recently they still are in big trouble. Throw into the equation another act of major terrorism in the USA and they are back to square one. The war in Iraq is still costing them big money, they can’t afford to lift rates.
Aust good job figures but the RBA would have cut rates except for the fear of inflating the housing market even more.
With low inflation the RBA cannot justify a lift in rates.i wouldn’t expect to see much change in rates up or down for a few years.
westan
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