Record high debt keeping rates at historic low 1.5pc

first_img MORE: Clive Palmer’s son loses small fortune on land bank FOLLOW SOPHIE FOSTER ON FACEBOOK Video Player is loading.Play VideoPlayNext playlist itemMuteCurrent Time 0:00/Duration 0:51Loaded: 0%Stream Type LIVESeek to live, currently playing liveLIVERemaining Time -0:51 Playback Rate1xChaptersChaptersDescriptionsdescriptions off, selectedCaptionscaptions settings, opens captions settings dialogcaptions off, selectedQuality Levels720p720pHD576p576p432p432p270p270pAutoA, selectedAudio Tracken (Main), selectedFullscreenThis is a modal window.Beginning of dialog window. Escape will cancel and close the window.TextColorWhiteBlackRedGreenBlueYellowMagentaCyanTransparencyOpaqueSemi-TransparentBackgroundColorBlackWhiteRedGreenBlueYellowMagentaCyanTransparencyOpaqueSemi-TransparentTransparentWindowColorBlackWhiteRedGreenBlueYellowMagentaCyanTransparencyTransparentSemi-TransparentOpaqueFont Size50%75%100%125%150%175%200%300%400%Text Edge StyleNoneRaisedDepressedUniformDropshadowFont FamilyProportional Sans-SerifMonospace Sans-SerifProportional SerifMonospace SerifCasualScriptSmall CapsReset restore all settings to the default valuesDoneClose Modal DialogEnd of dialog window.This is a modal window. This modal can be closed by pressing the Escape key or activating the close button.Close Modal DialogThis is a modal window. This modal can be closed by pressing the Escape key or activating the close button.PlayMuteCurrent Time 0:00/Duration 0:00Loaded: 0%Stream Type LIVESeek to live, currently playing liveLIVERemaining Time -0:00 Playback Rate1xFullscreenStarting your hunt for a dream home00:51 MORE: How much would you pay for a shed? MORE: Pat Rafter misses out on $1m payday MORE: NRL star’s renovated unit goes viral The overwhelming view was that it would remain in neutral (95 per cent probability).“While risks abound, the RBA Gov. indicated on November 20 the central scenario is playing out highlighting “the economy is moving in the right direction and further progress is expected in lowering unemployment and having inflation consistent with the target”.”Mr Newnaha added that annual wage growth not expected to rise above 2.75 per cent for at least the next two years “the RBA would be hard pressed to turn hawkish now”. Economists predict the Reserve Bank will keep the official cash rate at 1.5 per cent at the final board meeting of 2018 on Tuesday December 4. Picture: AAP Image/Brendan Esposito.The Reserve Bank board will keep rates at a historic low 1.5 per cent when it meets for the last time in 2018 on Tuesday — and your debts could be playing a part in that, analysts say.Financial experts and analysts across the board believe the RBA board was now “stuck in neutral” when it came to the official cash rate forecasts — and record high borrowing levels could be playing a role in that.The probability of RBA increasing rates by 25 basis points would rise in the New Year though, with TD Securities picking a 38 per cent chance by November 2019. Probability of a 25 bps RBA move from 1.5 per cent. Source: TD Securities/BloombergTD Securities senior Asia-Pacific rates strategist Prashant Newnaha said RBA’s focus on financial stability implied “there is a low probability the Bank will turn dovish with household debt to income at record highs”.He quoted RBA’s recent statement that “…the outlook for household consumption growth continues to represent a significant uncertainty for the forecasts”.The probability of RBA dropping rates was just 4 per cent, according to TB Securities analysis, and even more unlikely was that it would raise rates (1 per cent probability).More from newsParks and wildlife the new lust-haves post coronavirus15 hours agoNoosa’s best beachfront penthouse is about to hit the market15 hours agolast_img

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