The RBA had their monthly meeting today and decided to once again leave the cash rate on hold.
The minutes from the meeting read pretty much the same as those from July.
I will bullet point them to make it easier:
Globally
- The global economy is expanding (which is contrary to what of negative people around are saying!)
- Global inflation remains low while still increasing in some economies
Nationwide
- The average mortgage rate in Australia is less than what people were paying a year ago.
- GDP growth is expected to run a bit over 3% with public infrastructure upgrades supporting this.
- Household debt levels are high, which causes concern to the RBA while household income has not been growing as fast
- The prediction for the labour markets is strong with some skills shortages felt. Wage growth however remains low.
Property Markets
- One of the biggest influencers is that the Sydney and Melbourne property markets have eased. This is taking pressure of investment lending and default risk.
- Lenders are still actively marketing to high quality clients with competition between lenders for those.
Summary
We can predict that interest to stay on hold for quite so time yet. While the global economy is growing as it that locally, it is still not strong enough to warrant a rate rise at present. The RBA will only raise rates when necessary to control the economy and cool things off. This is will not be needed for some time yet.
