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Nov 7, 2012

RBA’s tale of two speeds: a non-cut will hurt many

The Reserve Bank has decided it can wait for the economy to weaken before cutting rates. Most Australian businesses -- at least outside of the mining sector -- wouldn't agree.

Didn’t win the Melbourne Cup sweep. Didn’t get a number in the $100 million lotto draw. And certainly didn’t get any joy from the Reserve Bank of Australia.

7 comments

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7 thoughts on “RBA’s tale of two speeds: a non-cut will hurt many

  1. Bill Hilliger

    The non cut won’t hurt self funded retirees. With 20 of the 27 economists believing the Melbourne cup is a trigger for interest rate cuts, these wizards should stick to predicting a Melbourne cup winner or go back to studying economics. If they do that they’ll probably find out the Melbourne cup race is not a predictor of interest rates. Ha, ha, ha! For these so called experts there is no great satisfaction in being wrong most of the time (they generally are). Tat so many economists expected the RBA to provide further relief to borrowers does at least suggest there is a herd mentality out there where one feeds off the other. All a bit of a laugh really.

  2. Yclept

    In other words, we’re trying to figure out what is going to keep the economy rolling along when the mining boom starts to really wind back.

    Well it won’t be retirees spending if they can’t earn a decent return on investments. Why is it that the only focus that seems to matter is getting mortgage rates down. I certainly remember when my mortgage rates were in the high teens.

  3. Bill Hilliger

    @Yclept – and so do I remember a housing interest rate cut from 16% to 15% – again from memory it wasn’t on Melbourne cup day either. Not like today’s horse racing linked economics of interest rate cut predictions.

  4. Simon Mansfield

    Zero risk – high returns – the entitlement mentality at “work” in modern day Australia.

  5. Roger Hosking

    …. RBA’s decision to leave rates on hold at 3.5% ….???

  6. zut alors

    ‘… the RBA’s decision to leave rates on hold at 3.5% — that has me most worried.’

    Frankly, you should be more worried that you don’t know the correct rate.

  7. Kevin Tyerman

    the fact that so many economists expected the RBA to provide further relief to borrowers does at least suggest this was a close call

    If borrowers need relief while we are at historically low rates, they probably shouldn’t have entered into the contract in the first place…

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