The politics of the RBA's independence means a struggle over Australia's economic outlook is being fought in the shadows
3 months, 3 weeks ago

The politics of the RBA's independence means a struggle over Australia's economic outlook is being fought in the shadows

ABC  

When the prime minister fronted the media just after 8am on Friday, the sense of elation was palpable. We now live in a world where the sainted independence of the RBA is such that the treasurer can't even be seen to be giving it a few "helpful suggestions" about interest rates. He says for the RBA's wage forecast to be achieved, "the quarterly pace of wages growth would need to accelerate to 1 per cent ". Overall, the data suggests "that the economy can run a lower level of unemployment that is consistent with inflation sustainably within the RBA's 2-3 per cent target band". The ANZ's underlying assessment is that given the "NAIRU is likely around 3.75 per cent, wages growth should undershoot the RBA's expectations".

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History of this topic

Has Australia's economy turned the corner? Angus Taylor has a warning
2 weeks, 1 day ago

Has Australia's economy turned the corner? Angus Taylor has a warning

ABC  

Economists say Australia has turned a corner. Last week, he said labour productivity was still "disastrous" in Australia and the purchasing power of our wages had deteriorated "disastrously" since Labor won the election in 2022. By the time the 2022 election was held, the "real" value of our wages had already deteriorated so much that our wages were buying less …

RBA delivers first rate cut since 2020
1 month ago

RBA delivers first rate cut since 2020

ABC  

Samantha Donovan: Hello, welcome to PM. So what we've seen is those really sticky items in the inflation baskets, I think insurance premiums, out-of-pocket health care costs, the cost of building a new dwelling or rental prices, those price increases have been such that the Reserve Bank has been worried that if it doesn't keep interest rate policy restrictive, and …

Australian shares marginally extend losses after RBA cuts rate as expected
1 month ago

Australian shares marginally extend losses after RBA cuts rate as expected

Live Mint  

By Adwitiya Srivastava Feb 18 - Australian shares slightly deepened losses after the local central bank delivered its highly anticipated interest rate cut for the first time in over four years on Tuesday, driven by a sell-off in heavyweight financials. The RBA cut rates by 25 basis points to 4.10%, easing its monetary policy for the first time since November …

Borrowers on edge ahead of RBA decision
1 month ago

Borrowers on edge ahead of RBA decision

ABC  

Andy Park: Hello, welcome to The World Today. If by its very nature, the Reserve Bank cutting interest rates stimulates demand and increases inflation, if underlying inflation still isn't within the Reserve Bank's band of between 2% and 3%, won't an interest rate cut have policy makers put up the white flag on inflation? Jane Bardon: The independent Yolngu MP …

Reserve Bank cuts interest rates for the first time since November 2020
1 month ago

Reserve Bank cuts interest rates for the first time since November 2020

ABC  

The Reserve Bank of Australia has cut interest rates for the first time since November 2020. RBA governor Michele Bullock noted that the rise in interest rates from the "emergency lows" of the pandemic had meant households with home loans were hurting, but argued high inflation caused more pain. At the post-meeting press conference, Ms Bullock said she couldn't confirm …

Why the Reserve Bank has little option but to cut interest rates
1 month ago

Why the Reserve Bank has little option but to cut interest rates

ABC  

After more than six months of conjecture and on-again off-again signals, interest rates are about to start a descent. In the December quarter, core inflation came in at just 0.5 per cent which, if you annualise it, comes in at just 2 per cent, smack bang at the bottom of the RBA's target range. Core inflation has dropped rapidly, more …

RBA chief's major hint that there could soon be some VERY good news ahead for home-owners
3 months ago

RBA chief's major hint that there could soon be some VERY good news ahead for home-owners

Daily Mail  

The Reserve Bank has given a strong hint borrowers are getting some interest rate cuts in 2025 even though inflation is still too high. The Reserve Bank has given a strong hint interest rate cuts are coming even though inflation is still too high While headline inflation is at a three-year low of 2.8 per cent, the RBA regarded this …

RBA Is More Confident on CPI, But Too Early to Declare Victory
3 months ago

RBA Is More Confident on CPI, But Too Early to Declare Victory

Live Mint  

-- Australia’s central bank is more confident that inflation is moving sustainably toward target but it’s still too soon to conclude the battle is won given a recent pick-up in consumption and a still-tight labor market, minutes of the December meeting showed. The Reserve Bank’s board discussed scenarios in which future policy would be eased to boost economic growth or …

NZ recession and Federal Reserve rate cut sink Aussie dollar but show the RBA dodged a bullet
3 months ago

NZ recession and Federal Reserve rate cut sink Aussie dollar but show the RBA dodged a bullet

ABC  

If you're looking for a last-minute overseas summer getaway, New Zealand is looking increasingly attractive. On the monetary policy front, the Reserve Bank of New Zealand started lifting its cash rate from COVID-19 lows of 0.25 per cent in October 2021 — a full seven months before Australia's Reserve Bank. Why a Fed rate cut sent the US dollar soaring …

The RBA is preparing for all economic scenarios, including an interest rate hike
3 months, 1 week ago

The RBA is preparing for all economic scenarios, including an interest rate hike

ABC  

The Reserve Bank may have dropped the phrase "not ruling anything in or out" in its interest rates commentary, but that does not mean an interest rate hike is completely out of the question. That is because, as Dr Hunter explained, it would mean the RBA's key policy goal of achieving its mid-point annual inflation target of 2.5 per cent …

Why the bout between the Reserve Bank and the federal government is about to heat up
3 months, 3 weeks ago

Why the bout between the Reserve Bank and the federal government is about to heat up

ABC  

There's an old adage that oppositions don't win elections, governments lose them. RBA Governor Michele Bullock says Australia's strategy of reducing inflation without stoking too much unemployment is part of the reason why it looks different to peer economies right now. RBA unlikely to react to October inflation data Photo shows Household money pic Australia's inflation rate remained steady in …

RBA unlikely to lower interest rates in 2024 despite inflation at its lowest level since July 2021
3 months, 3 weeks ago

RBA unlikely to lower interest rates in 2024 despite inflation at its lowest level since July 2021

ABC  

Australia's inflation rate remained steady in October, with analysts tipping this price data won't change the Reserve Bank's mind to hold interest rates at their highest level in about a decade until at least early 2025. The inflation rate held at 2.1 per cent annually, with the rising price of food, alcohol, cigarettes and recreational activities keeping it up, while …

Reserve Bank keeps interest rates at 4.35pc for eighth-straight meeting despite lower inflation
4 months, 2 weeks ago

Reserve Bank keeps interest rates at 4.35pc for eighth-straight meeting despite lower inflation

ABC  

The Reserve Bank of Australia has kept interest rates on hold at 4.35 per cent for its eighth-straight meeting, despite inflation falling to its lowest level in almost four years. In a statement, the RBA said while inflation has "fallen substantially" since it peaked in 2022, underlying inflation remained too high at 3.5 per cent in the September quarter. The …

The great New Zealand rate hike experiment and where it all went wrong
5 months, 3 weeks ago

The great New Zealand rate hike experiment and where it all went wrong

ABC  

You have to hand it to the Kiwis. In NZ, interest rates have started to fall Photo shows Skyscapers make up a very business end of town skyline As Australian mortgage holders wait for relief, the Reserve Bank of New Zealand cuts rates and green shoots emerge in the housing market. RBA keeps interest rates at 4.35pc Photo shows Reserve …

No RBA rate cut yet, but Governor Bullock is about to find the pressure overwhelming
5 months, 3 weeks ago

No RBA rate cut yet, but Governor Bullock is about to find the pressure overwhelming

ABC  

Who'd want to be Reserve Bank Governor Michele Bullock? Reserve Bank keeps interest rates on hold at 4.35pc Photo shows Reserve Bank of Australia generic The RBA has kept interest rates on hold at 4.35 per cent, saying inflation is still too high to start cutting rates. The Reserve Bank board has decided to keep the cash rate steady at …

Greens demand hostile takeover of RBA in exchange for passing board reforms in likely death knell for treasurer's bill
6 months ago

Greens demand hostile takeover of RBA in exchange for passing board reforms in likely death knell for treasurer's bill

ABC  

The Greens are demanding the government intervene to cut interest rates in exchange for their support on the Reserve Bank bill, an unprecedented condition that impedes Treasurer Jim Chalmers' effort to land his reform. However, in a new demand that will almost certainly result in Labor killing the initiative, Greens economic justice spokesman Nick McKim said Mr Chalmers should wield …

Why the Reserve Bank will be forced to cut rates before year's end
6 months, 2 weeks ago

Why the Reserve Bank will be forced to cut rates before year's end

ABC  

Until just a few weeks ago, it seemed as though the developed world had pulled off what once was thought to be the impossible. And yet, despite this mounting evidence of a critical economic slump, there remains a rump of high-profile economists openly criticising the Reserve Bank of Australia's reluctance to push interest rates above 5 per cent. Parliament House …

The RBA is making confusion about inflation and the cost of living even worse
6 months, 3 weeks ago

The RBA is making confusion about inflation and the cost of living even worse

ABC  

There's a paradox about the way we respond to threats to the cost of living. At the same time, when the cost of living climbs enough to push inflation beyond the Reserve Bank's target, the bank pushes up interest rates in an attempt to drive measured inflation down. Sharp interest rate increases are a problem The response of the Reserve …

The US is about to start cutting interest rates, so expect Australia to follow
6 months, 3 weeks ago

The US is about to start cutting interest rates, so expect Australia to follow

ABC  

Just three weeks ago, Reserve Bank Governor Michele Bullock declared interest rate cuts unlikely in the next six months. But if there was any doubt about what's going to happen to global interest rates, the US Federal Reserve chair Jerome Powell removed it on Saturday. Rate cuts by the US Fed and other central banks will create a near-irresistible pressure …

Finance guru Mark Bouris makes worrying admission about Australia
7 months, 2 weeks ago

Finance guru Mark Bouris makes worrying admission about Australia

Daily Mail  

Finance guru Mark Bouris has claimed that Australia has been in a recession for the past 18 months with the standard of living the worst its been in two years. Finance guru Mark Bouris has claimed that Australia has been in a recession for the past 18 months The cash rate is currently at a 12 year high of 4.35 …

RBA's Michelle Bullock says no cuts expected in next six months after leaving interest rates on hold
7 months, 2 weeks ago

RBA's Michelle Bullock says no cuts expected in next six months after leaving interest rates on hold

ABC  

The Reserve Bank of Australia has kept interest rates on hold at 4.35 per cent. "Financial markets have been volatile of late and the Australian dollar has depreciated," the RBA Board said in a statement. "In doing so, it will continue to pay close attention to developments in the global economy and financial markets, trends in domestic demand, and the …

The RBA has avoided the worst-case scenario with interest rates but economic uncertainty is looming
7 months, 2 weeks ago

The RBA has avoided the worst-case scenario with interest rates but economic uncertainty is looming

ABC  

That's the thing with silver linings. Here's how it happened Even with the carnage of the past few days, our market is only off 1.5 per cent since the start of the financial year, while some US indices are still in the black, giving an indication of just how fast stock markets have been running in recent weeks. Annual inflation …

RBA keeps interest rate at 4.35 per cent, says rate rise could be on cards as governor says she's not expecting a recession in Australia
9 months ago

RBA keeps interest rate at 4.35 per cent, says rate rise could be on cards as governor says she's not expecting a recession in Australia

ABC  

The Reserve Bank has kept interest rates on hold at 4.35 per cent. "Inflation has fallen substantially since its peak in 2022, as higher interest rates have been working to bring aggregate demand and supply closer towards balance," the Board said. RBA governor warns the narrow path is 'getting a bit narrower,' but doesn't expect a recession The RBA board …

RBA Sees Some Households Struggling, Suggesting Rate-Hike Limits
9 months, 3 weeks ago

RBA Sees Some Households Struggling, Suggesting Rate-Hike Limits

Live Mint  

-- Australia’s inflation is showing persistent strength and weighing heavily on the finances of some households, a senior Reserve Bank official said, highlighting the limits to further interest-rate increases. “The board are absolutely focused on the fact that inflation is clearly still above the target band,” RBA Assistant Governor Sarah Hunter said at a conference in Sydney on Thursday, referring …

RBA should now 'in theory' hike interest rates in June, but will it?
9 months, 3 weeks ago

RBA should now 'in theory' hike interest rates in June, but will it?

ABC  

Inflation is rising again, and that's a problem for both the government and the Reserve Bank. The annual rate of inflation has ticked up slightly in April to 3.6 per cent, from 3.5 per cent in March, but economists say it's enough to put even more pressure on the Reserve Bank. "At the moment consumers are the ones copping all …

The Reserve Bank's interest rate dilemma: Households are hurting but inflation remains stubbornly high
10 months, 2 weeks ago

The Reserve Bank's interest rate dilemma: Households are hurting but inflation remains stubbornly high

ABC  

Please make it stop. That's what Michele Bullock must say to herself after RBA board meeting days, when journalists conjure a dozen different ways to ask the same question — what's going to happen with interest rates? Over the past year, the inflation rate for discretionary goods and services has been within the RBA's 2-3 per cent target band, at …

RBA Financial Stability Review says Australia's banks safe even as up to 85,000 borrowers risk running out of cash
1 year ago

RBA Financial Stability Review says Australia's banks safe even as up to 85,000 borrowers risk running out of cash

ABC  

In short: Around 5 per cent of mortgage borrowers currently spend more than they earn on essentials and their mortgage, and more than 2 per cent could run out of savings by the end of next year. Around 5 per cent of mortgage borrowers currently spend more than they earn on essentials and their mortgage, and more than 2 per …

Did the Reserve Bank hit the brakes too hard? Why Australia's economy is heading into reverse
1 year ago

Did the Reserve Bank hit the brakes too hard? Why Australia's economy is heading into reverse

ABC  

The softening-up process is already underway. There's now every possibility the GDP numbers could tip negative, giving the first real indication that Australia's economy is shrinking under the weight of 13 interest rate hikes in quick succession. The RBA lifted the cash rate to 4.35 per cent last November, but it hasn't fully flowed through to the whole economy. Prepare …

Why the RBA may be forced to cut interest rates before the Fed
1 year, 1 month ago

Why the RBA may be forced to cut interest rates before the Fed

ABC  

There's been a nearly universal assumption by both analysts and traders that the US Federal Reserve will effectively kick off the global rate-cutting cycle for developed economy central banks. While the average mortgage rate in Australia has risen by 3.2 percentage points since the RBA started hiking, US home borrowers, on average, have seen their interest rates rise 0.5 of …

RBA governor Michele Bullock says she doesn't agree with IMF that Australia needs higher interest rates
1 year, 1 month ago

RBA governor Michele Bullock says she doesn't agree with IMF that Australia needs higher interest rates

ABC  

Reserve Bank governor Michele Bullock says she doesn't agree with the International Monetary Fund that Australia should be lifting interest rates even higher. Earlier this week, the RBA board decided to keep Australia's cash rate steady for another six weeks, at 4.35 per cent, saying there were "encouraging signs" that inflation was falling as required. RBA keeps interest rates steady …

Commonwealth Bank forecasts massive interest rate cuts for Australians: Here's when the country's biggest bank predicts they will begin
1 year, 3 months ago

Commonwealth Bank forecasts massive interest rate cuts for Australians: Here's when the country's biggest bank predicts they will begin

Daily Mail  

The Commonwealth Bank is now forecasting six interest rate cuts in 2024 and 2025 - starting in September next year as Australian inflation moderates faster than predicted. Mr Halmarick is basing his prediction of 150 basis points of rate cuts, in 2024 and 2025, on inflation falling back to the top of the Reserve Bank's two to three per cent …

Why further RBA interest rate hikes are less likely now than even one week ago
1 year, 4 months ago

Why further RBA interest rate hikes are less likely now than even one week ago

ABC  

Since Australia's Reserve Bank hiked interest rates two weeks ago, there have been two important developments — one in the United States and the other in the United Kingdom. In this way, decisions made in the US not to increase interest rates or even to cut them make it easier for Australia's Reserve Bank not to increase rates — or …

Reserve Bank keeps interest rates on hold but many more Australians to soon hit breaking point
1 year, 5 months ago

Reserve Bank keeps interest rates on hold but many more Australians to soon hit breaking point

ABC  

The Reserve Bank of Australia held its meeting today — the first chaired by new governor Michele Bullock – and economists and markets were right in widely tipping that it would keep interest rates on hold. Some fear this "higher for longer" interest rate environment that central banks have warned of could mean we soon hit a breaking point. The …

RBA leaves interest rates on hold for second consecutive month
1 year, 7 months ago

RBA leaves interest rates on hold for second consecutive month

ABC  

The Reserve Bank has left interest rates on hold for consecutive months for the first time since it started raising them in May last year. Key points: The RBA's benchmark cash rate target remains at 4.1 per cent The central bank expects inflation to fall back below 3 per cent by late 2025 However, RBA governor Philip Lowe warns more …

RBA's rate hikes creating inflation, Ross Garnaut says, calling for radical overhaul of economic policy
1 year, 10 months ago

RBA's rate hikes creating inflation, Ross Garnaut says, calling for radical overhaul of economic policy

ABC  

Australia's economy has become increasingly dominated by powerful firms that are extracting "economic rents" from the system, economist Ross Garnaut is warning. "There have been big changes over the 21st century that greatly affect Australia's capacity to deliver rising standards of living to most people in a growing population," Professor Garnaut said. Professor Garnaut said "economic rent" referred to income …

RBA delivers 'massive' interest rate hit to millions of Australians already struggling with overwhelming cost pressures
1 year, 10 months ago

RBA delivers 'massive' interest rate hit to millions of Australians already struggling with overwhelming cost pressures

ABC  

It was designed to shock, and it did just that. On Tuesday, the Reserve Bank of Australia increased its cash rate target — after a month's pause — by 0.25 percentage points, to 3.85 per cent. "Don't forget that the RBA estimates that 15 per cent of variable rate borrowers will move into negative cash flow by year's end if …

RBA interest rate rise catches markets, banks and borrowers by surprise
1 year, 10 months ago

RBA interest rate rise catches markets, banks and borrowers by surprise

ABC  

The Reserve Bank of Australia has shocked borrowers and financial markets by resuming interest rate rises after a one-off pause last month. Key points: RBA lifts rates by 0.25 of a percentage point to 3.85 per cent The cash rate is now at its highest level since it was cut to 3.75 per cent in May 2012 Philip Lowe says …

Reserve Bank hikes cash rate to 3.85 per cent, ASX hits three-week low, Qantas appoints new CEO to replace Alan Joyce
1 year, 10 months ago

Reserve Bank hikes cash rate to 3.85 per cent, ASX hits three-week low, Qantas appoints new CEO to replace Alan Joyce

ABC  

Here are some comments from Callam Pickering, an economist at global job site Indeed. He's just put out this note on the rate decision, which I think is worth quoting in full: "The flow of recent economic data provides a compelling case for further rate hikes,” he said. "The RBA anticipates that further rate hikes may well be needed to …

What does the RBA review offer for Australians struggling with the cost of living? Not enough
1 year, 11 months ago

What does the RBA review offer for Australians struggling with the cost of living? Not enough

ABC  

In Australia, right now, we are at risk of entrenching deep inequality and further flaming the housing crisis. But given the Reserve Bank's key role of reducing inflation to within a range of 2 to 3 per cent, by raising interest rates, remains unchanged — notwithstanding a new focus on keeping folks in jobs — what on earth will this …

Does everyone welcome the Reserve Bank overhaul?
1 year, 11 months ago

Does everyone welcome the Reserve Bank overhaul?

ABC  

The push to overhaul the Reserve Bank of Australia could be a "watershed moment" in Australian economic policy, some economists say. The Australian Council of Social Service said it would be a "hugely important step" when the RBA had to give equal weight to its inflation target and full employment when setting interest rates. RBA says some changes won't be …

What does the Reserve Bank of Australia review mean, and how will it affect interest rates and mortgage payments?
1 year, 11 months ago

What does the Reserve Bank of Australia review mean, and how will it affect interest rates and mortgage payments?

ABC  

A scathing review of the Reserve Bank of Australia is set to deliver a shake-up of the central bank not seen in a generation. If you haven't read the 294-page report — or are confused about the economic jargon — here's what the review says, what it means for interest rates, your mortgage and for RBA governor Philip Lowe. Treasurer …

The RBA's interest rate pause was a close call that could change as early as next month
1 year, 11 months ago

The RBA's interest rate pause was a close call that could change as early as next month

ABC  

The Reserve Bank has revealed its decision to pause its aggressive interest-rate-hiking strategy was a close call, while warning that more hikes may be needed to tame inflation. Key points: The RBA kept interest rates on hold this month for the first time in a year Minutes from the meeting show board members want time to see the lagged impact …

Did the Reserve Bank's interest rate hikes put Australia's economy on a 'knife-edge'? A major consulting firm thinks so
1 year, 11 months ago

Did the Reserve Bank's interest rate hikes put Australia's economy on a 'knife-edge'? A major consulting firm thinks so

ABC  

A major consulting firm has criticised the Reserve Bank for increasing interest rates unnecessarily, pushing hundreds of thousands of household budgets deep into the red. In the March edition of its Business Outlook report, Deloitte Access Economics partner Stephen Smith claims the two quarter-of-a-percentage-point interest rate hikes in February and March were "unnecessary" and leave Australia "facing the weakest rate …

Federal Reserve hikes interest rates but gives RBA room to pause
2 years ago

Federal Reserve hikes interest rates but gives RBA room to pause

ABC  

Never waste a crisis. "We did consider that in the days running up to the meeting," Powell told reporters in a press conference after today's rate rise decision, referring to a period where the banking crisis threatened to spiral out of control. But Powell was keen to maintain a link between the US banking crisis and inflation when explaining why …

Why RBA interest rate hikes could end by September – but brace for at least one more
2 years ago

Why RBA interest rate hikes could end by September – but brace for at least one more

ABC  

Tuesday's 10th successive Reserve Bank interest rate hike is the culmination of a process that has added $1,080 to the monthly cost of payments on a $600,000 variable mortgage. I've calculated this increase in payments — which amounts to $12,960 per year — by comparing payments on the National Australia Bank's base variable mortgage rate before the Reserve Bank started …

Reserve Bank of Australia raises interest rates to 11-year high, opens the door to a pause
2 years ago

Reserve Bank of Australia raises interest rates to 11-year high, opens the door to a pause

ABC  

The Reserve Bank of Australia has raised interest rates for the 10th consecutive meeting, taking the cash rate target to 3.6 per cent. Key points: The cash rate target of 3.6 per cent is the highest since May 2012 The 0.25 of a percentage point rate rise will add around $77 a month to repayments on a $500,000 mortgage RBA …

Interest rate rise: Treasurer Jim Chalmers backs RBA boss as Aussies face mortgage stress
2 years, 3 months ago

Interest rate rise: Treasurer Jim Chalmers backs RBA boss as Aussies face mortgage stress

Daily Mail  

Treasurer Jim Chalmers has responded to calls for a major overhaul of the Reserve Bank as interest rates soar to a 10-year high. The RBA raised interest rates by a quarter of a percentage point to 3.1 per cent on Tuesday much to the distress of mortgage holders who have faced eight consecutive rate rises. Treasurer Jim Chalmers is supporting …

With another interest rate rise this week, will the RBA put the handbrake on in 2023?
2 years, 3 months ago

With another interest rate rise this week, will the RBA put the handbrake on in 2023?

ABC  

As we approach year's end, the question on home loan borrowers' minds is will there be more interest rate rises next year? He also indicated more interest rate rises could be on the cards, with the headline rate of inflation still well above the Reserve Bank's 2 to 3 per cent target range. Forecasts for February rate rises are mixed …

Reserve Bank raises interest rates for eighth straight month
2 years, 3 months ago

Reserve Bank raises interest rates for eighth straight month

ABC  

The Reserve Bank of Australia lifts interest rates by 0.25 of a percentage point, taking the cash rate target to 3.1 per cent. Key points: The RBA has raised its cash rate target to 3.1 per cent That is the highest official interest rate in a decade Its 0.25 of a percentage point rise in rates will add around $75 …

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