Shane Oliver has increased his probability of Australia entering a technical recession to 50 %, which means that the Australian economy must experience two consecutive quarters of negative GDP growth. Oliver identifies the key risk of entering recession stems from the lagged impact of mortgage rate rises, which has led to consumer spending falling as… Continue reading Elephant in the Room
Author: Matthew Jones
The Spanish Solution
The Reserve Bank of Australia has again paused on raising the official cash rate leaving it unchanged from 4.10 %. In his statement on Tuesday the RBA governor Phillip Lowe stated that he expected Australia’s CPI inflation “will continue to decline, to be around 3.5% by the end of 2024.” An observation by senior APAC… Continue reading The Spanish Solution
RBA on hold again
The decision by the Reserve Bank to keep the official cash rate on hold at 4.1 % on Tuesday, suggests that the Bank believes it has lifted them enough after 12 near consecutive rate hikes. They again paused to see if their tightening has started to rein in inflation. At face value their rate hikes have… Continue reading RBA on hold again
NAIDOC Week
I’ve changed the topic for this week’s article to talk about NAIDOC week, which is a departure from my usual conversation about business. For my international readers and, that’s around 15 % of base. NAIDOC Week happens annually in Australia and celebrates the history, culture, and achievements of Aboriginal and Torres Strait Islander peoples. “NAIDOC”… Continue reading NAIDOC Week
Hard Landing Ahead?
The relentless monetary tightening cycle by the Reserve Bank of Australia continued, despite economic growth groaning under the strain of prior hikes. Much like the Maroons piling on the pressure on the Blues in the State of Origin on Wednesday night. The economy is demonstrating classic signs of reaching a tipping point and a policy… Continue reading Hard Landing Ahead?
Is it time for a housing strategy?
Researchers have argued that Australia needs a national housing strategy to ensure that adequate housing is available to everyone in the country. Their report titled Towards an Australian Housing and Homelessness Strategy: understanding national approaches in contemporary policy, found that Australia’s incoherent and fragmented housing policies have become so unworkable that a circuit-breaker is needed.… Continue reading Is it time for a housing strategy?
Mortgage stress at new heights.
Mortgage stress has reached its highest level since August 2008, with 27.8% of mortgage holders being rated ‘At Risk’ by Roy Morgan following the recent RBA interest rate rise to 4.1%. Roy Morgan considers a borrower to be “At Risk,” if their mortgage payments surpass a predetermined level. This level is traditionally met when 25%… Continue reading Mortgage stress at new heights.
Cost of Living Pressure continues to rise.
Headline inflation picked up last month as energy prices jumped, while the underlying price pressures eased reducing the chances of another Reserve Bank rate rise in June. Consumer prices advanced 6.8% in April, the Australian Bureau of Statistics said on Wednesday, a rate higher than the 6.4% pace economists had expected, and the 6.3% reading… Continue reading Cost of Living Pressure continues to rise.
Time to leave the table.
On Tuesday the Reserve Bank of Australia lifted the official cash rate to an 11-year high of 3.85 per cent. The last time Australia experienced a similarly aggressive tightening of monetary policy was also when Ray Price or Mr Perpetual Motion led the Paramatta Eels to a Premiership. Incidentally, this remains their most recent Premiership… Continue reading Time to leave the table.
ANZAC Day
I’ve taken a break from my regular business posts to focus on a more personal topic. For the benefit of my international readers, or around 15 % of my site traffic, 25 April is commemorated annually in Australia to recognise current and former military personnel’s service. The date was chosen as on 25 April 1915… Continue reading ANZAC Day