Nov 2023 Rate Rise? Prediction

Trying2SaveABuck on 27/10/2023 - 10:44

Both Unemployment being lower then expected and CPI being significantly higher then forecasted has most likely left the RBA in the blunt tool position of upping rates in my opinion.

Regardless the question needs to be asked what do you think our RBA chef Michele Bullock will do in November?

personally speaking i cant see how they dont rise the cash rate meaning more pain for borrowers the question is about how hard they rise…..

The other question needs to be asked despite the rises hurting borrowers they are 'also' helping savers which is somewhat inflationary as those who are 'cash rich' (many older Australians without debt) are benefiting and spending more…..do we need to look at a different way to battle inflation ie increase mandatory super (temporarily) to reduce the bulk of workers 'take home pay' ?

Poll Options

  • 1
    Cut interest rates any %
  • 27
    Hold interest rates
  • 93
    0.25% rise
  • 13
    0.5% rise
  • 2
    Rise by any other %
Financial

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Comments

  • stuffandthat on 27/10/2023 - 11:06
    +8

    Michele will raise it and will then hold in December to make herself look like she's our saviour.

  • Jimothy Wongingtons on 27/10/2023 - 11:08
    +2

    a little off topic but anyone getting a little stressed out about paying off hecs sooner? dat cpi is getting a little spicy…

    • resisting the urge on 27/10/2023 - 11:45

      If everyone stopped saving their excess cash in bank accounts, Michelle would be cutting rates like the future of the Reserve Bank depended on it.

      They monitor how much is there in near real-time.

      The Bank will only stop cutting when they've succeeded in milking the general public's savings down to zip to pay for gov mismanagement across all 9 govs, and all the lobbyists Voicing their love every day as they are paid to by the miners, developers, pharmas, covid, aukus, doctors, lawyers, etc.

      • EightImmortals on 27/10/2023 - 13:45
        -1

        What if I'm saving up for a house so I don't NEED a bankster loan?

      • leiiv on 29/10/2023 - 11:43
        +1

        Can you explain your logic? By increasing the rate, one of the intention is to actually make people to save money into the bank account, and make them spending less.

        • resisting the urge on 29/10/2023 - 17:23

          The RBA ingests household finances in near real time, and values most highly data on disposable incomes, borrowings, and savings. Given they continue to attempt to 'balance the books' by adjusting plain old cash rate monetary policy, and printing money Quantitative Easing, they can see once the public is unable to fund their game theory by reducing the 'funds available' in household accounts (such as saving account balances and other investments we might still have in a financial institution or two).

          This increases the speed of money in the economy also, as small fiscal changes (such as raising social security by a few dollars a week) result in 100% increase in consumer spending (and related corporate profits (?!)). Thus making the RBA's job even more vital to its stakeholders. They see this is a Win-Win.

          @leiiv; Your point about savings is a valid one, which is why the RBA ingests household balance sheets for multiple segments. Many data brokers do the same thing across numerous groups, demographics and electorates. If the government cannot afford a given electorate to be impacted, it can watch this and take action to stave off the projected effects as the RBA increases the cash rate. This leads to the ongoing argument around the questionable propriety of the RBA when claiming it 'acts independently' of the government of the day's political interests, but its convenience as the right mallet for this particular thumb tack wins out, every time.

          Not sure if it helps, but I always consider the savings stored in institutions to be a by product of monetary policy, not a leading indicator. After all, if people were serious about investing at call funds to reap gains, there are many 'safe' yet more lucrative returns available via hundreds if not thousands of financial 'products'.

          Some is published (but not well explained) over at https://www.rba.gov.au/statistics/. See also ABS, APRA any one of the data brokers busy relating, analysing and selling our every past and likely future action to the institutions that use it to evaluate, target consumers peasants.

  • echelon6 on 27/10/2023 - 11:17
    +9

    Please stop, my anus can only take so much.

  • scotty on 27/10/2023 - 11:21
    +2

    Saw it on Fairfax newspaper yesterday:

    The country’s big four banks - Commonwealth, ANZ, NAB and now Westpac - believe the change is sufficiently large enough to warrant a rate rise, but all have noted it would be a close call.

    If all of big 4 think that it's likely…

    Also from OP:

    the rises hurting borrowers they are 'also' helping savers

    Only if the interest rate for savers also rises. But recently we actually had a interest rate reduction from one of the banks.

  • onetwothreefour on 27/10/2023 - 11:23
    +8

    Saver here so hopeful for another rise.

    • MonkeyMagic1977 on 27/10/2023 - 11:31
      +5

      Funny enough I have a mortgage and would prefer it to go up likewise.
      Cost of living getting out of control, RBA's only way to curb it
      Unfortunately pain is one of the quickest way we learn

      • Loot N Plunder on 27/10/2023 - 12:08

        Cost of living getting out of control

        What shits me is factors outside Australia control such as fuel should not be counted towards national inflation it should only be Australian manufacturing, food, wages etcetera that should be counted as Australian inflation
        Billion dollar multinationals should be paying for their inflation costs with higher taxes on them not the Australian population who are trying to keep up with inflation
        Australians are just chasing their tails trying to keep up with the cost of living causing US ALL to fall further behind and in some instances are actually going backwards after a wage rise

        Wake up politicians and stop making (punishing) us (we the people) pay for multinational profits.
        We should be closing these loopholes they constantly abuse

        • Drakesy on 27/10/2023 - 13:58

          What shits me is factors outside Australia control such as fuel should not be counted towards national inflation

          Funny thing it is within Australia's control, yes there are temporary perturbations in fuel prices, however leaving our interest rates lower (relatively) than other countries is primarily to benefit our exporters, not importers. This has a direct relation with the strength of the AUD, the lower the interest rate relative to other countries the lower the AUD/USD exchange rate which in turn increases costs of imports and hence cost of living.

          It's a double edged sword, low interest rates help mortgage payers, yet increases cost of living due to the weak AUD.
          We need higher interest rates to stimy expenditure and increase the AUD before reverting to lower interest rates later on. Currently the RBA is too scared to do anything at risk of falling into a recession (something Australia was already in pre-covid).

      • loropy9 on 27/10/2023 - 14:42

        Can RBA put a stop to foreign property investors? That way your rates won't have to go up to curb foreign investor spending.

        • MonkeyMagic1977 on 31/10/2023 - 19:25
          +1

          The RBA does not set foreign investment laws, the treasury dept does.
          In saying that why would the polticians curb foreign property investment when many of them are making a profit from the inflow the cash from foreigners?
          Realistically Foreign Investment has now created a bubble that should it decline would hurt those already in the market. Politicians aren't going to put through a policy which is going to hurt the chances of re-election and their own retirement funds.

    • Stopback on 27/10/2023 - 11:35
      -1

      Nah I prefer lower rates but a booming stock market.

      • MonkeyMagic1977 on 27/10/2023 - 11:44

        Just put your money on the businesses leveraging these times. Easy to guess who.

  • FrugalFranky on 27/10/2023 - 11:37
    +5

    Rates will rise. I don't see any stopping of Aussies spending money anywhere. Malls are packed, my cafe is packed every morning despite my almond flat white being 6.50$+ now! (I'm including me in this as well… still spending just as much as before, thank the wife for that)

    • KaTst3R on 27/10/2023 - 11:56
      +3

      Your name don't check out at all !

    • hasher22 on 28/10/2023 - 01:59

      You don't know the stats if people are actually spending savings or credit.

      Stats show 9.6% increase in credit card use from 2022
      BNPL debt has increased 20% from April 2022 to April 2023

      Thing is, people want to maintain their lifestyle without cutting back so they will use BNPL and credit to support this.

    • Stopback on 28/10/2023 - 08:39

      People are substituting spending.

      Cafe is cheaper then trips

    • commiewealth on 01/11/2023 - 09:34

      Why should Aussies stop living their life?
      Maybe the Government should do something about the trash economy instead of wasting people's time and tax dollars with nonsense referendums and other garbage.

  • Sleeqb7 on 27/10/2023 - 11:54
    +1

    my almond flat white being 6.50$+ now!

    Jesus Christ Franky, what are you doing to us?

  • pharkurnell on 27/10/2023 - 12:20

    Unemployment being lower then expected

    I dont believe it with all these building companies and business going toes up daily.

    • Sal in SA on 27/10/2023 - 13:34
      +1

      But they are not ..are they -
      And the few (relatively) that do -there is more than enough work still for the builders / tradies to find other work.

  • Drakesy on 27/10/2023 - 12:23
    +10

    If they don't put it up the RBA will be taking the piss.
    Australian dollar getting decimated.
    House prices going back up, petrol going through the roof, inflation heading back up.

    Economy is overheating again, and the RBA is blindly letting it "play out".
    Funny thing is though the spending isn't coming from the homeowners, it's coming from the boomers and those that already have paid off their house. They literally have no leavers to control this and it shows. Whilst everyone else is cutting back the 60+ age group have increased their expenditure that nullifies any cutbacks and they're ready to buy more property at excessive prices.

    Admittedly the government needs to do something about immigration and how they're putting pressure on our lack of infrastructure. But no they only want to keep the property ponzi scheme going to the detriment of Australians who can't afford to have kids and a house anymore.

    Hooray!

    IMHO they need a 0.5% rise but they don't have the balls to do it (literally).

    • JimB on 27/10/2023 - 15:05

      " spending isn't coming from the homeowners, it's coming from the boomers and those that already have paid off their house. They literally have no leavers to control this and it shows. Whilst everyone else is cutting back the 60+ age group have increased their expenditure that nullifies any cutbacks"

      Yup. If anything, higher rates will allow those with large savings to spend more.

      It hurts those with large loans and tenants the most… two groups who have the least capacity for spending.

      I haven't yet increased my rents for 2 of my low priced rental. If rates go up anymore, I won't be able to absorb extra costs anymore and will unfortunately have to increase rents so they remain neutrally geared.

  • Stalker on 27/10/2023 - 13:27

    100% that it will be 0.25%. Lock it in!

  • Caerdyddblue on 27/10/2023 - 14:22
    +2

    Is there a specific reason why the RBA didn't start aggressive and taper off? Back at the start of all the rate rises, inflation was clearing spiralling, imo they could have gone with 0.5% and less 0.1/0.25% rises early on. Seems to me that they were just helping the banks make billions by dragging this out so long rates will stay high for years.

    If such a high percentage of the population were on low fixed mortgages and it taking months for any rate rises to take any effect I just can't work out why they didn't go very aggressive at the start.

    • plmko on 27/10/2023 - 15:07

      They are being politically held back.

  • JIMB0 on 27/10/2023 - 21:53
    +1

    Quarter of a percent will be it. Should be more like half a percent really.

  • freefall101 on 27/10/2023 - 22:14

    The other question needs to be asked despite the rises hurting borrowers they are 'also' helping savers which is somewhat inflationary as those who are 'cash rich' (many older Australians without debt) are benefiting and spending more…..do we need to look at a different way to battle inflation ie increase mandatory super (temporarily) to reduce the bulk of workers 'take home pay' ?

    It's not really inflationary because people who are cash rich are more incentivised to invest. If they stick their cash in a savings account/term deposit they'll be earning a lot more than they have in the past.

    The real problem is companies usually pump growth on cheap credit. Since that has dried up, they're pumping price increases which offsets the lack of capital spend - particularly when unemployment is so low anyway.

    Decreasing take home pay while there's a cost of living crisis would be political suicide too. The government is already struggling to walk back tax decreases.

  • DarkOz on 28/10/2023 - 10:05
    +5

    The RBA should never have put interest rate on hold for the last 4 months. We now ended up at least 1% lower than comparable countries while inflation is still too high and for too long and property is already booming again. For the low income households the grind has gotten harder and much much longer.

    I would be shocked if they put it on hold again. This is the last chance this year as it won't happen in December.

    • leiiv on 29/10/2023 - 11:37

      It's pretty obvious they're trying to save the housing market from reaching the tipping point of collapsing.

      • Ghost47 on 31/10/2023 - 20:51

        Good thing the government is stepping in by importing hundreds of thousands of people to keep demand high. Now that housing prices have recovered and are headed upwards an increase shouldn't be too detrimental.

  • commiewealth on 31/10/2023 - 13:20
    +2

    My savings account just dropped by .10% but the rates are going up? What a crock of shit.

  • whitepuma on 31/10/2023 - 20:51

    ah you beat me to it

  • sss333 on 07/11/2023 - 14:42

    0.25% rise the result

    • whyisave on 07/11/2023 - 14:45

      source: https://www.rba.gov.au/media-releases/2023/mr-23-30.html

      Statement by Michele Bullock, Governor: Monetary Policy Decision

      Number 2023-30
      Date 7 November 2023

      At its meeting today, the Board decided to raise the cash rate target by 25 basis points to 4.35 per cent. It also increased the interest rate paid on Exchange Settlement balances by 25 basis points to 4.25 per cent.

      Inflation in Australia has passed its peak but is still too high and is proving more persistent than expected a few months ago. The latest reading on CPI inflation indicates that while goods price inflation has eased further, the prices of many services are continuing to rise briskly. While the central forecast is for CPI inflation to continue to decline, progress looks to be slower than earlier expected. CPI inflation is now expected to be around 3½ per cent by the end of 2024 and at the top of the target range of 2 to 3 per cent by the end of 2025. The Board judged an increase in interest rates was warranted today to be more assured that inflation would return to target in a reasonable timeframe.

      The Board had held interest rates steady since June following an increase of 4 percentage points since May last year. It had judged that higher interest rates were working to establish a more sustainable balance between supply and demand in the economy. Furthermore, it had noted that the impact of the more recent rate rises would continue to flow through the economy. It had therefore decided that it was appropriate to hold rates steady to provide time to assess the impact of the increase in interest rates so far. In particular, the Board had indicated that it would be paying close attention to developments in the global economy, trends in household spending, and the outlook for inflation and the labour market.

      Since its August meeting, the Board has received updated information on inflation, the labour market, economic activity and the revised set of forecasts. The weight of this information suggests that the risk of inflation remaining higher for longer has increased. While the economy is experiencing a period of below-trend growth, it has been stronger than expected over the first half of the year. Underlying inflation was higher than expected at the time of the August forecasts, including across a broad range of services. Conditions in the labour market have eased but they remain tight. Housing prices are continuing to rise across the country.

      At the same time, high inflation is weighing on people’s real incomes and household consumption growth is weak, as is dwelling investment. Given that the economy is forecast to grow below trend, employment is expected to grow slower than the labour force and the unemployment rate is expected to rise gradually to around 4¼ per cent. This is a more moderate increase than previously forecast. Wages growth has picked up over the past year but is still consistent with the inflation target, provided that productivity growth picks up.

      Returning inflation to target within a reasonable timeframe remains the Board’s priority. High inflation makes life difficult for everyone and damages the functioning of the economy. It erodes the value of savings, hurts household budgets, makes it harder for businesses to plan and invest, and worsens income inequality. And if high inflation were to become entrenched in people’s expectations, it would be much more costly to reduce later, involving even higher interest rates and a larger rise in unemployment. To date, medium-term inflation expectations have been consistent with the inflation target and it is important that this remains the case.

      There are still significant uncertainties around the outlook. Services price inflation has been surprisingly persistent overseas and the same could occur in Australia. There are uncertainties regarding the lags in the effect of monetary policy and how firms’ pricing decisions and wages will respond to the slower growth in the economy at a time when the labour market remains tight. The outlook for household consumption also remains uncertain, with many households experiencing a painful squeeze on their finances, while some are benefiting from rising housing prices, substantial savings buffers and higher interest income. And globally, there remains a high level of uncertainty around the outlook for the Chinese economy and the implications of the conflicts abroad.

      Whether further tightening of monetary policy is required to ensure that inflation returns to target in a reasonable timeframe will depend upon the data and the evolving assessment of risks. In making its decisions, the Board will continue to pay close attention to developments in the global economy, trends in domestic demand, and the outlook for inflation and the labour market. The Board remains resolute in its determination to return inflation to target and will do what is necessary to achieve that outcome.

  • umoddbro on 07/11/2023 - 14:55
    +1

    Wont be passed on to savers till December….if any at all.

    • El-Rhi on 07/11/2023 - 15:00

      Yep, I’d be surprised if anyone passed on more than 0.15%. Hope I’m wrong though

  • JIMB0 on 07/11/2023 - 15:18
    +1

    They should have seized the opportunity to get rid of the silly 0.1% hangover from COVID and made it an even 4.5%

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