Australian interest rates

Over the weekend, The AFR’s John Kehoe defended the Reserve Bank of Australia’s (RBA) “straight talking”, saying that it is “needed to cut through the noise” in the “age of political spin and social media echo chambers”.

Australia experienced its largest-ever increase in mortgage refinances over the last three years.

By Gareth Aird, head of Australian economics at CBA.

The Market Ear with the latest positioning.

Following the 0.4% fall in the ABS monthly inflation indicator for October, CBA economist Stephen Wu believes there is a good chance that Australia’s CPI inflation could fall below 4% by the end of this year.

Last week, rookie Reserve Bank of Australia (RBA) Governor, Michele Bullock, chose to attack spending on dentists and hairdressers for driving up Australia’s CPI inflation.

Report from the ABS.

The Age reports that home owners in Melbourne’s growth suburbs owe tens of millions of dollars in overdue rates amid soaring mortgage stress.

Treasurer Jim “Chicken” Chalmers has done us all a favour, potentially, by giving the RBA an external rocket up the wazoo: Treasurer Jim Chalmers has lured a foreigner to become the Reserve Bank of Australia’s new deputy governor, appointing British central banker Andrew Hauser as second in charge at the central bank.

Last week’s Commbank IQ data on spending was an eye-opener and would no doubt be causing headaches within the Reserve Bank of Australia (RBA).

The 2023 Risk Radar Report from credit bureau Experian shows that recent first home buyers that purchased in 2019 or later are suffering the highest rates of mortgage stress, as well as missed payments.

In this week’s Treasury of Common Sense on Radio 2GB and 4GB, I discussed how the RBA is on a hiding to nothing on inflation and desperately needs a circuit-breaker from the federal government in the form of lower immigration: Below are some highlights, along with key charts.

Rookie Reserve Bank of Australia (RBA) governor, Michele Bullock, stupidly chose to attack spending on dentists and hairdressers for driving up Australia’s CPI inflation.

Independent economist, Tarric Brooker, posted the above chart on Twitter (X) showing how Australian households are spending a far higher share of their income on debt repayments than other advanced nations: “Despite rocketing rates, Canada’s household debt service ratio now is similar to Australia’s when we had a 0.1% cash rate”, Brooker notes.

By Belinda Allen, Senior Economist at CBA: Key Points: The November Board Minutes reiterate the case to hike was to mitigate the risks of a slower return of inflation to target.

The Aussie 10-year yield may be forming a head-and-shoulders top: The Aussie curve is still inverted in the belly suggesting endless per capita recession: I am bullish on duration in Australia because global forces will pull down yields.

By Gareth Aird, head of Australian economics at CBA: Key Points: The already released prices data for October suggest that inflationary pressures have cooled over the early part of Q4 23.

As we know, Mad Albo and Chicken Chalmers have already delivered the worst real income shock in modern Australian history: Thanks in large part to two major macro blunders.

RBA futures are still forecasting no rate cut until the end of 2024: Bonds markets are less hawkish but equally sceptical of any easing in 2024: The problem is Alboflation.

In the US, not Australia.