RBA cuts the cash rate by 0.75%

RBA: Media Release-Statement by Glenn Stevens, Monetary Policy

 

The RBA is filling Australian household's chirstmas stocking early this year!

I wonder if they they have any plans to cut again in December to be on the conservative side seeing as they won't meet again until February and in this current climate a lot can change over 2 months...?

 

They will probably cut rates once more in December but how much
would depend on how the retail activity is at the time.

We have already started to spend more but like everyone else we haven't recovered yet from the media scare campaign.

Even our government is doing their bit to scare consumers.
They say that they will give us money to spend and on the other hand they are telling us that the sky is about to fall so people naturally won't be spending money.

cheers

 

I agree BV,

It's all that jaw-boning...

CBA have dropped rates by 0.58% CBA first bank to cut mortgage rates | NEWS.com.au

Cheers,

Dan

 

good one, if you have a 1 mill $ loan you will save $111 / WEEK

 

I welcome interest rate cut and waiting for more but at the same time I am under impression our government is running experiment on "human reactions"
One day they say spend next don’t, It’s almost as if they have no idea what to do.

 

AHAHA - I'm pretty sure like most people in life even the experts are just working things out as they are going along. There is just way too many unknown variables in the extremely complex organism that is the called the "world economy" for mere individuals, organizations or even governments to fully understand and predict the future with any significant degree of certainty.

I can't complain about rate cuts - paying less interest is great and is quickly pushing my IP towards being positively geared. Though being a student of economics, the magnitude and speed of the recent cuts scare me. Rate cuts like this haven't happened since the recession of the early 90's.

 

funny how the RBA have failed to contain inflation.. so this just shows the whole exercise was a waste of time.

The inflation was imported, and unless resources dropped in value, inflation would continue. The RBA know this and thats why they now expect inflation to ease soon due to the current material price drops.

 

Inflation is not really an issue anymore, commodities prices have moderated, oil prices have collapsed and the slow down will result in a deflationary environment for services and retail goods.

This is all very good it means interest rates can come down further without the RBA having to worry about inflation as a consequences.

Chris C is right thought the fact that the cash rate has fallen so fast does paint a worrying picture.

 

But wait...there will be more!

 

What is the interest rate your bank charging you now?
I am still paying 8.1 %!

 

7.04% with CBA. variable.

 

Just called the bank. It will be 7.06% on Monday next week.
They just want to scamp a couple of weeks of higher IR.

 

but they are very quick to raise rates hey! when I was with locums group, they increased rates always the next day!

 

I know, and they are also quick to drop the interest on our savings accounts as well

 

And they pass on the full RBA rate cut on a savings account (ie where they pay you), and only pass on some of the cut on a loan account (where you pay them.)

The difference between my savings rate and loan rate has widened. Was 10.65% vs 5.25% and is now 9.85% vs 3.25%.

Don't like it. But what can you do?

 

buy bank shares!

 

one problem with bank loans is they can charge what they want when they want.

Really the contract should say x% above the cash rate.

not that they charge what they feel like.

 

I'm with CBA as well, getting 7.04%.