The Australian housing game has changed
The Reserve Bank has lifted the cash rate for the second time in two months, this time by 0.50 points to 0.85%. It won’t be the last such hike. Forecasters expect the cash rate to hit 2.5% by the end of next year. This would lift the typical variable mortgage rate to near 5%. Cue…
Record high inflation could trigger a fresh eurozone financial crisis
Any crunch would centre on Italy, have no obvious solution and remind that the euro’s frailties are unaddressed. Italy’s 66th post-war government collapsed in January 2021 when Prime Minister Giuseppe Conte was forced to resign after former premier Matteo Renzi removed his minor Italia Viva party from the ruling coalition. President Sergio Mattarella encouraged the…
Economics – Lifting the minimum wage
Stand by for something “reckless and dangerous”. That’s what former prime minister Scott Morrison said Prime Minister Anthony Albanese would be if he asked the Fair Work Commission to grant a wage rise big enough to cover inflation. It would make Albanese a “loose unit” on the economy. Yet Albanese and his industrial relations spokesman…
The 4 economic election wildcards
There are four economic wildcards between now and the election, and we know exactly when each will be played. The first is this Wednesday at 11.30am eastern time, when we get the official update on inflation. We’re likely to see a figure so large it will take many of us back to the 1990s, to…
Why the RBA should go easy on rate hikes
One of the stranger things about the Reserve Bank’s announcement of why it’s lifting interest rates by 0.25 percentage points is that it suggests inflation will come down by itself. “A further rise in inflation is expected in the near term,” the RBA says, “but as supply-side disruptions are resolved, inflation is expected to decline…
How long until mortgage rates climb?
Australian consumer prices jumped an extraordinary 2.1% in the first three months of the year, the biggest quarterly jump since the introduction of the 10% goods and services tax at the start of the century. The outsized increase, together with a larger than normal increase in the months to December, pushed Australia’s annual inflation rate…
The yield curve: a crystal ball for the next recession?
Ask an investor what they would most like to know in advance and the timing of the next recession might be high up their list. The correlation between the ups and downs of the stock market and the ebb and flow of the economy is not exact but there is clearly a link. Recessions are…
Technically the unemployment rate begins with a 3
The official employment figures say the unemployment rate for March was 4.0%, exactly the same as a month earlier. But if you’re prepared to download the spreadsheet and work it out, you’ll find that expressed to two decimal places the rate actually fell, from 4.04% to 3.95%. The Bureau of Statistics confirms this by saying…
Why the RBA won’t hike interest rates just yet
The biggest question relating to the management of the economy right now has nothing to do with next week’s budget. It has everything to do with the Reserve Bank and the board meetings that will follow it. The question facing the board – the biggest there is when it comes to how the next few…
Why China’s strong start to 2022 is unlikely to continue
Some recent bumper economic data in China shouldn’t distract from a worsening outlook. China’s economy made a strong start to 2022, but financial markets are already pricing in tougher times ahead. This is because a large wave of new Covid cases in China in recent weeks has coincided with a deteriorating global outlook. We still…
