Seriously is pointing to a newspaper article the only ability you have.
Tell me how will a rise in US rates affect us and how much difference do you think it will make. (hint - it will make some difference when US rates rise)
Take risks - if you win you will become wealthy, if you lose you will become wise
"Consumer prices" is rather broad. The deflationary pressures on FMCG products across the globe is massive at the moment. U.S. and Japan have been ravaged and it's a completely new business model now. However, they have the economies of scale to make the adjustments, unlike here in high-cost-structure-stan where we're forced to keep service and product costs high. Deflationary adjustments in a similar fashion would be devastating for the economy. Our suburbanites need to be reamed as deep and as hard as possible.
Seriously is pointing to a newspaper article the only ability you have.
Tell me how will a rise in US rates affect us and how much difference do you think it will make. (hint - it will make some difference when US rates rise)
This is the problem when poorly informed people like you read headlines but don't read the story.
HINT - headlines are written by a sub-editor not the author. They are the clickbait you swallowed.
In this story the author made it clear when he said:-
The reason Australian mortgage holders may suffer is not as simple as assuming domestic interest rates will follow US rates. That’s unlikely, at least in the short term, as the Reserve Bank of Australia (RBA) actually may be forced to cut again if the Australian economy slips.
The author clearly understands even if you don't. The RBA sets our rates, not the US Fed. In fact the Fed could raise rates while our RBA lowers them. Until you understand how and why rates are set you understand nothing.
Bond investors would in fact have that effect on some countries, but not for Australia. The RBA doesn't care about what the bond investors want.
The RBA doesn't choose when to raise or lower rates and by how much.
The RBA simply react to market forces (strength of the AUD being a major driver).
Matthew, 30 Jan 2016, 09:21 AM Your simplistic view is so flawed it is not worth debating. The current oversupply will be swallowed in 12 months. By the time dumb shits like you realise this prices will already be rising.
Jimbo, the RBA absolutely choose when it alters rates and by how much and in what direction.
Only in the same way that you choose whether or not to turn up the aircon in your car.
Matthew, 30 Jan 2016, 09:21 AM Your simplistic view is so flawed it is not worth debating. The current oversupply will be swallowed in 12 months. By the time dumb shits like you realise this prices will already be rising.
The RBA doesn't choose when to raise or lower rates and by how much.
The RBA simply react to market forces (strength of the AUD being a major driver).
If this was true, why wasn't the RBA cutting back when the dollar was on it's way to, and then over $US parity? Interest rates are lower now by a large margin with the dollar at ~$US0.75c. So the evidence of what actually happens does not back up your statement.
Rufus us correct - RBA has complete control over the overnight cash rate, and therefore the short term end of the interest rate curve to a large extent. They set it to what they think it should be based on a range of factors, with the goal of controlling (well let's say influencing maybe) inflation primarily and employment / GDP growth as well. The market set's longer the longer term end of the curve - but this is still heavily influenced by the RBA set base rates, and the rate of new money creation the results from this setting.
True. You can choose to cook to death in your car if you want to.
Matthew, 30 Jan 2016, 09:21 AM Your simplistic view is so flawed it is not worth debating. The current oversupply will be swallowed in 12 months. By the time dumb shits like you realise this prices will already be rising.
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