Is the party almost over for Australia’s low interest rates?
After one of the strongest 12-month cycles in living memory, and inflation fears grow, there is mounting pressure on the RBA to confirm whether interest rates will rise before their mandated 2024 date.
But regardless of the RBA’s actions, Australia’s big four banks are making moves, adjusting both variable and fixed rates.
In this TUD Plus Briefing, ANZ senior economist Felicity Emmett explores what the bank is thinking about the timing of a rate rise, how inflation and wages will fare in coming years and the question for intervention.
“The RBA has been very clear that it doesn't think interest rates are the appropriate tool to slow house prices,” Emmett said.
“House prices really are not in the RBA’s mandate, and neither is it for APRA, the regulator, but what they and others do care about is the growth that we’ve seen in housing credit and the fact that that very strong growth has actually come at a time when income growth has been quite weak.
“So, what the regulators are concerned about is that people are perhaps getting themselves too indebted.”