Australian interest rates

It’s never a good sign when central bankers appear on prime-time TV.

The Bank for International Settlements (BIS) has released its global household debt statistics for the December quarter of 2021. This data shows that Australia once again took the silver medal for household debt when measured against Gross Domestic Product (GDP).

While we often prognosticate over the impact of aggressive interest rate rises on the housing market, the bigger worry is what happens to household consumption and the economy.

As Aussie yields jackknife, we can ask: is Australia in a sovereign debt crisis?

JPM: Two developments since the May CPI report reinforce the case for a more hawkish FOMC meeting on Wednesday, in our view.

The Grattan Institute has published analysis showing that Australian households with a mortgage are facing a sharp rise in mortgage interest repayments in the event that projected increases in the official cash rate (OCR) come to fruition.

Following Tuesday’s ‘shock’ 0.5% hike in Australia’s official cash rate (OCR) to 0.85%, Australia’s futures market raised its interest rate expectations.

Former Reserve Bank of Australia (RBA) governor, Ian Macfarlane, has warned that inflation is unlikely to return to the RBA’s target range of 2% to 3%.

The Australian Workers Union’s (AWU) national secretary, Daniel Walton, says it is “absolutely fair and reasonable” that pay increases are in line with the rising cost of living, given that there has been a decade of wage stagnation.

You’d think that they’d learn.

FT Alphaville has published an enlightening article that helps to explain why wages globally have failed to lift amid tight labour markets and low unemployment.

Our Bill at Westpac.

Gareth Aird is pretty much the only bank economist we know making sense.

The Aussie bond curve is starting to price in the RBA policy error.

Don’t say I didn’t warn you.

Even before yesterday’s 0.5% rise in the official cash rate (OCR) by the Reserve Bank of Australia (RBA), major indicators were pointing to the beginning of a severe house price correction.

Despite non existent wage pressures, the Reserve Bank of Australia (RBA) has hiked the official cash rate (OCR) by 0.5%.

Good job, RBA: Well done, RBA.

As we know, the the Reserve Bank of Australia (RBA) is forecast to aggressively lift interest rates over the coming year.

Our Bill is slashing his outlooks.