MB Fund Podcast: Why immigration is the key to Australian interest rates in 2022

In today’s investment webinar MB Fund’s Head of Investments Damien Klassen, Chief Economist Leith van Onselen and Senior Financial Advisor Sam Kerr illuminate us on why immigration is the key to Australian interest rates in 2022. On the agenda:

  • After 11 long years of interest rate cuts, many commentators and markets are forecasting a rise in the official cash rate.
  • Whether Australian inflation picks up largely depends on wage growth, which has undershot RBA forecasts for a decade.
  • The planned reboot of pre-COVID levels of immigration will suppress wage growth and ergo inflation, meaning interest rates could remain lower for longer.

Can’t make it to the live series?  Catch up on the content via Podcasts or our recorded Videos.


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Damien Klassen is Head of Investments at the MacroBusiness Fund, which is powered by Nucleus Wealth.

 

The information on this blog contains general information and does not take into account your personal objectives, financial situation or needs. Past performance is not an indication of future performance. Nucleus Wealth Management is a Corporate Authorised Representative of Nucleus Advice Pty Ltd – AFSL 515796.

 

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Comments

  1. Jumping jack flash

    “After 11 long years of interest rate cuts, many commentators and markets are forecasting a rise in the official cash rate.”

    Well that would certainly be the current aim of the Fed (and all central banks) in my opinion. Raising interest rates would be proof that the last 15 years of back to back and systematic interest rate cuts (with the exception of 2007) to limp the economy along has actually resulted in a successful economy that is now strong enough to warrant raising rates again!

    Their knee-jerk and lazy strategy of implementing interest rate manipulation post dotcom bust and 9/11 to avert collapse will have been proved a resounding success, and not simply soaked the people in debt and made the banks richer at the expense of the rest of the planet.

    Even though in my opinion they have pretty much doomed the [global] economy to become a false economy which is simply based on debt growth now and an extension, and plaything, of the banks.

    But then again, its all relative. If governments everywhere decided to hand the keys of their economies to the banks and everyone does the same thing at the same time, is it really considered an economic anomaly anymore, or is it just the new reality?

  2. Sadly, it’s probably the most rational action to take. If Australia had higher interest rates and lower unemployment (due to more stringent controls on immigration) there would be a higher $A . That would make Australian exports less profitable and Australian manufacturing would collapse without tariffs or subsidies. Capital controls might be needed as well to stop foreign money being parked in our banks. The world would react to our attempts to go against the flow with various trade barriers etc. The world is interdependent.