Interest Rates to Fall by How Much?

The last inflation data came out at a record low and is a trigger for the RBA to move on the cash rate. In addition here are some observations supported by data released that will support such a decision.

Delinquencies in Home Loans and Credit cards are rising

The residential property market in the two major capital cities Sydney and Melbourne has not bottomed out and further falls will continue. Hobart that was holding the fort with positive property prices has come to and end.

  • Wages are stagnant
  • Household savings are at record lows due to cost of living pressures
  • Cost of living has sky rocketed although wages have been flat
  • Full time jobs are being casualised
  • Poverty is at an underrepresented level of between 24-26% an embarrassment for a 1st world country.
  • Underemployment is at record levels at 1.1 Million +
  • The budget needs major repair as debt has grown to a record level
  • Global contraction of trade and the economy’s of the OECD countries are heading South.

In view of the above as we have called previously the RBA would see fit to cut the cash rate by 50 basis points to stimulate the economy quicker considering the four major banks will not pass on the full interest rate cut to their customers. We made a similar call once before and the RBA did just that. Who ever wins the next election it will be a daunting task to repair the budget that is in a mess besides to claim the economy is strong is a myth and the RBA is well aware of that.

This is the moment to look at your options and move to 2nd tier lenders with low interest rates and no fees.

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