Interest rates Stay on Hold – September 2019 Update

Good news for property investors that rates have stayed on hold for another month. The next anticipated move will likely be downwards.

The RBA remained on hold at a record low cash rate of 1% at its September board meeting as was anticipated. This followed 0.25% rate cuts in June and July.

The Bank’s notes around that decision changed little from previous months. Even further escalation of the US-China trade war last month did not really have a bearing on the decision process.

In regards to the Australian Economic outlook, the RBA had this to say:

  • although it still sees growth strengthening to around trend, this is only expected to occur “gradually”;
  • the outlook for consumer spending remains the main domestic uncertainty;
  • noting that wages growth remains subdued with little upwards pressure; and
  • inflation will likely be subdued for some time yet. Which is good news for the cost of living.

Governor Lowe’s expects an “extended period of low interest rates” and noted that the Board stands ready to ease monetary policy again if needed, indicating that the Bank retains an easing bias.

The RBA is still waiting to see what sort of boost to growth the rate cuts of June and July and the Federal Government’s tax cuts for low and middle income earners provide.

So while the RBA is content to wait for now, we continue to see two more rate cuts this year taking the cash rate down to 0.5%, with the next cut likely coming next month.