RBA keeps cash rates on hold at 4.35 per cent despite RBA discussions about another hike

The Reserve Bank of Australia (RBA) kept interest rates on hold despite stronger-than-expected inflation and the ever-growing specter of rising house prices.

Meeting today on its new two-day schedule, the RBA’s board discussed raising rates once more, but ultimately decided to keep the official interest rate target at a 12-year high of 4.35 percent.

“The board discussed the possibility of raising interest rates. He discussed the possibility of keeping interest rates where they were,” RBA Governor Michel Bullock said at his post-meeting press conference.

“Ultimately, the board feels that staying where they are is appropriate at this time. We believe this policy is currently restrictive.”

She said the board does not expect to have to raise rates again, but is open to the possibility if inflation continues to remain higher than the bank would like.

“The data towards the end of last year and the beginning of this year made everyone think, ‘oh, it’s good now,'” she said.

“We’ve always felt it’s too early to declare victory and I think the numbers in recent weeks have shown that…

“We don’t think we necessarily need to tighten again, but we can’t rule it out.” If we have to, we will. If we really think inflation is going to be sustained and significantly above our forecasts, we will tighten again.”

She also added that if it weren’t for last November’s rate hike, the board might have had to raise rates today.

Financial markets largely did not expect a change in the exchange rate, with economists divided on when – not if – the central bank would cut.

Reserve Bank of Australia Governor Michelle Bullock.
Michelle Bullock said the RBA had discussed. (Louis Duvis/AFR)

In his monetary statement, Bullock said more data needed to be seen in the current economic climate before providing relief to borrowers.

“The latest data shows that inflation continues to slow, but it’s coming down more slowly than expected,” Bullock said.

“The board expects that it will be some time before inflation reaches the target range sustainably and will remain vigilant about upside risks.”

“The interest rate path that will best ensure that inflation returns to target over a reasonable period of time remains uncertain and the Board is not ruling anything out.”

“The board will rely on the data and the evolving risk assessment. In doing so, he will continue to pay close attention to developments in the global economy, trends in domestic demand, and the outlook for inflation and the labor market.

“The Board remains resolute in its determination to return inflation to target.”

In her monetary statement, RBA Governor Michele Bullock said more data needed to be seen in the current economic climate before providing relief to borrowers. (Graphic: Polly Hanning)

CreditorWatch chief economist Anneke Thompson said the jobs data – not inflation – would force the RBA’s hand.

“Even a moderate easing of the labor market would likely mean we are at the top of this tightening cycle, as smaller businesses and many household businesses will now be in a precarious financial position given the high cost of debt,” Thompson said.

“The RBA is unlikely to risk further damage to sectors of the economy least able to cope.”

Canstar finance expert Steve Mickenbecker said borrowers desperate for a rate cut should not wait for a final call from the RBA.

“If borrowers choose to wait for the Reserve Bank to cut interest rates and lenders to follow suit, they could face thousands of dollars in extra payments and interest,” explains Canstar finance expert Steve Mickenbecker.

“However, taking up the option to switch now could lead to significant savings, especially with the first rate cut forecast in November.

“By refinancing now, borrowers can lock in savings over the next six months or so if interest rate cuts meet the big four banks’ expectations in November, and then double down when rates eventually fall.” It is difficult to refute this approach. “

Every metropolitan bar in Canberra has collapsed in the last month.

The suburb is costing tenants over $1,300 a week

Finder’s analysis shows the minimum household income needed to afford Australia’s median home price has risen to $171,223.

This increases if one wants to buy in Sydney (minimum household income of $263,195) or Canberra (minimum household income of $185,599).

“Many Australians dream of owning their own home, but it’s getting harder and harder to get your foot in the door,” Cook said.

“Dwellers in major capital cities now need a significant household income just to comfortably service the average mortgage without even considering saving for a deposit.”

The information provided on this website is of a general nature only and does not constitute personal financial advice. The information has been prepared without taking into account your personal goals, financial situation or needs. Before acting on any information on this website, you should consider the suitability of the information for your goals, financial situation and needs.

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