The Reserve Bank meets tomorrow, and while it seemed like a pretty close decision, the chances we’ll see the cash rate cut to 0.50% have dropped significantly.
That’s because last week brought some good news with a decrease in unemployment from 5.2% to 5.1% — the lowest it’s been since April 2019.
Before this the market was pricing a February cut at 58%. That number plummeted to 19% a day after the unemployment data was released.
Whilst Former Treasurer Peter Costello has urged the Reserve Bank to refrain from cutting rates to a new record low out of fear it could reignite a housing price bubble in Sydney and Melbourne following a “welcome correction” in home values over the past year.
As the RBA board prepares to meet for the first time since December, Mr Costello stated, the central bank had to be “very careful” it did not risk further pumping up house prices by cutting official interest rates, which he said were failing to stimulate the economy."
He made the comments ahead of news that inflation rose by 0.7 per cent in the December quarter, slightly above expectations.
“We’ve already got a cash rate of 0.75 per cent, suppose it goes to 0.5 per cent. I don’t think people holding off spending are going to say ‘I wouldn’t have done it at 0.75%, but I’m going out there now that it’s 0.5 per cent?” Mr Costello emphasized.
We have a number of lenders offering interest rates at 2.99% and below. A number of lenders are also offering attractive “cash backs” for refinancing so there has never been a better time to consider changing lenders. Our best interest rates on offer are attached and can be downloaded from our web site. The website rates are updated regularly as is the Interest Rates poster that can be downloaded and then displayed at any open inspections.
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