Interest Rates

It seems likely that rates will be eased again in April/May

Westpac, whilst I am not a fan of their culture and would never want to work for them, they admittedly have had the best track record for accurately predicting interest rate movements. Their predictions are based on their interpretation of what the RBA’s commentary on rates and analysis of economic trends.

The RBA it is worth noting, has not committed to another rate cut, but according to Alan Mitchell from the Financial Review, it has done the next best thing by incorporating two cuts in the official cash rate in its February forecasts of the Australian Economy.

Glenn Stevens, the RBA’s governor stated “Further easing of policy may be appropriate over the period ahead, in order to foster sustainable growth in demand and inflation consistent with the target”

The Australian dollar he suggests, will probably have to fall from its current level for the economy to resume balanced growth. This would not be good for travel abroad obviously.

The RBA may just sit though and observe the economy and also the US market. The US market may be travelling closer to a rate rise, while the property market is cooling.

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