Login
iscover
Amid speculation of rising interest rates, the Reserve Bank of Australia (RBA) has made its first cash rate call for 2022.
It’s left the cash rate at the record-low rate of 0.1 per cent for February.
The RBA’s decision comes amid speculation that higher interest rates would come sooner rather than later – especially following the release of the December unemployment rate of 4.2 per cent.
Acknowledging that the unemployment rate is the lowest the country has seen since August 2008, Bluestone’s Dr Andrew Wilson was quick to point out that it didn’t necessarily reflect “steady” economics.
“The low rate unsurprisingly fuelled predictions from the usual suspects of a surge in wages growth stoking higher inflation and resulting in RBA interest rate increases this year,” he said.
Explaining that the national result was significantly influenced again by the NSW and Victoria recoveries from the severe COVID lockdowns of previous months, Dr Wilson said the short-term outlook for the national labour market is anything but certain – and we have Omicron to blame.
And with the RBA recently doubling down on its expressed intention to not raise rates until national wages growth is “materially higher than it is currently”, Dr Wilson believes “predictions of official interest rate rises as soon as August are clearly nonsensical”.
Real Estate Institute of Australia (REIA) president Hayden Groves is also not expecting the RBA to make a move any time soon – citing the latest consumer price index (CPI) numbers.
REB previously reported that the All Groups CPI increase of 1.3 per cent for the December quarter and 3.5 per cent for the year hints at relatively stable monetary settings for the remainder of 2022, according to Mr Groves.
“Whilst the increase in the analytical series are the highest for over six years, they remain within the RBA’s long term target rate of 2 to 3 per cent,” he said.
The president expressed: “This suggests that there will be no immediate pressures on interest rates.”
ABOUT THE AUTHOR
Grace Ormsby
Grace is a journalist across Momentum property and investment brands. Grace joined Momentum Media in 2018, bringing with her a Bachelor of Laws and a Bachelor of Communication (Journalism) from the University of Newcastle. She’s passionate about delivering easy to digest information and content relevant to her key audiences and stakeholders.
You are not authorised to post comments.
Comments will undergo moderation before they get published.