Search by ticker code:
Generic filters

Search by ticker code:
Generic filters

Search by ticker code:
Generic filters

RBA Interest Rates: What Economists Expect

The Reserve Bank of Australia (RBA) official interest rate is expected to hold steady at 1.5% today, September 4th.

Economists’ Interest Rate Forecasts

According to the Westpac Banking Corp (ASX: WBC) weekly update, the RBA, “is certain to leave rates on hold at 1.50%.” 

However, despite the RBA keeping rates on hold since August 2016 (it hasn’t raised rates since November 2010), Westpac said, “lending conditions in the housing market have tightened.” 

According to National Australia Bank Ltd. (ASX: NAB), interest rates are tipped to stay on hold at 1.5% today. The bank is forecasting a 0.25% rise to 1.75% in June 2019.

Of the 25 economists polled by Bloomberg, every one of them expects rates to remain on hold.

Does it Matter?

In the last week, Westpac, Suncorp and Adelaide Bank have increased mortgage interest rates citing higher funding costs. Many of Australia’s largest banks source a big part of their loan funding from US debt markets, where interest rates have been rising.

As the RBA’s Tessa McKinnon wrote in March 2018: “The major banks obtain a larger share of funding from offshore wholesale markets compared with other Australian-owned banks.”

As we wrote here, CBA and Westpac Could Be Forced To Raise Interest Rates, the USA’s reserve bank is being tipped by some pundits to raise interest rates once every three months.

Property Prices

On Monday, CoreLogic reported the 11th consecutive month of falling Australian property prices.

Weaker housing market conditions can be tied back to a variety of factors, foremost of which is the tighter credit environment which has slowed market activity, especially amongst investors,” CoreLogic’s Tim Lawless noted.

“Fewer active buyers has led to higher inventory levels and reduced competition in the market.”

Adding to concerns is the number of failed refinancing attempts by investors and homeowners.

Data from Digital Finance Analytics and UBS suggest a year-over-year increase in the number of defaults.  “About 40 per cent of people who tried to refinance were unable to do so,” Digital Finance Analytics principal Martin North wrote in a blog. “If you go back a year it was 5 per cent.”

The Best Finance Podcast On Earth*

The Rask Group’s Australian Investors Podcast is fast becoming Australia’s #1 podcast for serious investors. It provides unique insights from Australia’s best investors, entrepreneurs, authors and financial thinkers. Download the latest episode free on iTunes,  CastboxYouTube or wherever you choose to listen.

*as voted by us.

$50,000 per year in passive income from shares? Yes, please!

With interest rates UP, now could be one of the best times to start earning passive income from a portfolio. Imagine earning 4%, 5% — or more — in dividend passive income from the best shares, LICs, or ETFs… it’s like magic.

So how do the best investors do it?

Chief Investment Officer Owen Rask has just released his brand new passive income report. Owen has outlined 10 of his favourite ETFs and shares to watch, his rules for passive income investing, why he would buy ETFs before LICs and more.

You can INSTANTLY access Owen’s report — or get it emailed to you — for FREE by CLICKING HERE NOW or the button below.

Unsubscribe anytime. Read our TermsFinancial Services GuidePrivacy Policy. We’ll never sell your email address. Our company is Australian owned.

Information warning: The information on this website is published by The Rask Group Pty Ltd (ABN: 36 622 810 995) is limited to factual information or (at most) general financial advice only. That means, the information and advice does not take into account your objectives, financial situation or needs. It is not specific to you, your needs, goals or objectives. Because of that, you should consider if the advice is appropriate to you and your needs, before acting on the information. If you don’t know what your needs are, you should consult a trusted and licensed financial adviser who can provide you with personal financial product advice. In addition, you should obtain and read the product disclosure statement (PDS) before making a decision to acquire a financial product. Please read our Terms and Conditions and Financial Services Guide before using this website. The Rask Group Pty Ltd is a Corporate Authorised Representative (#1280930) of AFSL #383169.

Skip to content