The Westpac/Melbourne Institute Index of Consumer Sentiment was down by 5% in March. This is from a high of 101.1 in February and at a similar level to the October survey before the two rate cuts by the RBA. So it seems, in the short term at least, that lowering rates hasn’t done much to imbibe confidence in the economy, particularly when the banks don’t pass on the rates whilst house prices fall. Or was just the hold – and why are consumers worried/hoping/clanging fora 0.25% change in mortgage rates or small business a 1% reduction in tax.
Matt Cowgill kindly let me use his chart tracking the index:
My trading nous asks if this correlates with movement in house prices, but the trend is definitely flat with a bearish bias, particularly in the face of lowered rates.
Here’s the release: