Remember last year when the Reserve Bank cut official interest rates to a record 0.1% and said it wouldn’t lift them until “at least” 2024? But as borrowers may have noticed, fixed interest rates have started to creep up in recent months, particularly for longer terms of four and five years, for example.
In early July, researcher RateCity found a growing list of lenders had also started raising their two- and three-year fixed rates with sub-2% three-year loans disappearing fast.
As fixed-rate loans reflect expectations for future interest rates, most analysts believe we have passed the bottom of the interest rate cycle, though the latest round of lockdowns may push any future rate rises further back.
Economists also placed significance on Reserve Bank governor Philip Lowe’s suggestion that the bank could lift rates earlier, though it was unlikely before 2024.
GUIDED BY THE DATA
Statements on interest rates from the Reserve Bank are a bit like oracles that we all examine closely looking for a glimpse into the future. And while Lowe did appear to leave open the possibility of rates rising before 2024, he made it clear the bank would not lift them early without good reason or without warning the market.
He said it would not act until inflation was “sustainably” in the 2%-3% range.
“It is not enough for inflation to be forecast to be in this range,” he said. “We want to see results before we change interest rates. An increase in the cash rate depends upon the data not the date. It is based on inflation outcomes not the calendar.”
Bu hikaye Money Magazine Australia dergisinin September 2021 sayısından alınmıştır.
Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 8,500+ magazines and newspapers.
Already a subscriber ? Giriş Yap
Bu hikaye Money Magazine Australia dergisinin September 2021 sayısından alınmıştır.
Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 8,500+ magazines and newspapers.
Already a subscriber? Giriş Yap
Is the public market shrinking?
Australia needs a healthy stock market to give companies access to funds and to allow retail investors to build wealth.
India: three steps to transformation
Massive investment and extensive reforms turbocharge the economy.
The ballet of business
Changing direction, products, models and marketing is a hard task for a business. We chart what it takes to turn a business around, plus profile four successful pivots.
Save money and the planet
Could the high cost of living give us the incentive we need to reduce how much water and energy we use or waste? These eco-friendly household tips will help you do just that.
AI adoption is the new black
Artificial intelligence is set to reshape the commercial world, and small enterprises can’t afford to miss the boat.
Spam attack! Murky laws jam our inboxes
Unwanted marketing material is one of the pain points of modern life.
From rags to riches in style
Rich Tran sported a bowl cut until he was 14 years old and had no intention of becoming a hairdresser.
New work deals are killing the 'old' office
The Covid pandemic and the subsequent lockdowns accelerated the trend to more people working from home. It was a mixed experience.
Points taken: the truth about rewards
Can hopping between credit cards really boost your frequent flyer haul and give you cheap or free travel - or is it doing more harm than good behind the scenes? Money puts it to the test.
Shortcuts to own a home
Innovative ideas with a focus on low costs and sustainability could help solve the housing crunch.