The Reserve Financial institution’s choice leaves the official rate of interest at 3.6%. But when housing costs begin rising, one other hike may very well be on the horizon.
Does the Reserve Financial institution (RBA) need home costs to rise? Why did they not hike rates of interest right this moment?
The RBA has been counting on home costs falling to assist scale back consumption and decrease inflation. The well-known “wealth impact” that makes owners spend extra as their property rises in worth has gone into reverse lately, with declining values making owners tighten their belts and spend much less.
That’s a really deliberate technique. The RBA has spelled out precisely how this works within the minutes of its month-to-month conferences.
Learn extra in regards to the RBA’s pause on rates of interest.
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