Interest rates RBA
Ross Greenwood: There was no surprise that the Reserve Bank kept interest rates on hold at 1.5 percent.
What really is important right now is what the Reserve Bank does next.
Up until now, the expectation has been that interest rates would fall.
But money markets indicate that it believes that markets will increase the interest rates by perhaps early next year.
The Reserve Bank, right now, says that it believes the economy will gradually get back into line – but it does note that wages pressures continue in Australian households and, of course, there have record levels of debt that could hold back the speed of interest rate rises in the future.
Treasurer Scott Morrison spoke just a short time ago – here’s what he said about the rate move today …
Scott Morrison: What we’ve seen from the bank today, in their decision to keep rates where they are, is not just a continuing stability I think in where things are at, but an optimism about where things are headed.
Ross: So for now interest rates will continue to be on hold for the rest of the year.
But in the meantime, investors in property markets, plus also those with interest only loans, will likely continue to see interest rate increases to cool housing markets – especially in Sydney and Melbourne.