Is it the bot­tom of the rate cy­cle? Econ­o­mists pre­dict one more cut

Port Douglas & Mossman Gazette - - FRONT PAGE -

ECON­O­MISTS are read­ing Re­serve Bank gover­nor Glenn Steven’s state­ment on last Tues­day’s board meet­ing as fairly non-com­mit­tal about the fu­ture di­rec­tion of in­ter­est rates.

The gover­nor noted that: ‘‘The pace of bor­row­ing has re­mained rel­a­tively sub­dued, though re­cently there are signs of in­creased de­mand for fi­nance by house­holds’’. He may have been al­lud­ing to APRA data that showed strong growth in hous­ing loans, even while the over­all growth in hous­ing loans out­stand­ing was sub­dued as peo­ple pay down ex­ist­ing debt.

Many econ­o­mists be­lieve the Re­serve Bank is wait­ing to gauge the ef­fect of the four re­duc­tions in its cash rate so far this year, but due to the per­sis­tent slug­gish­ness over­all in the econ­omy- mid-level depart­ment store sales, ris­ing un­em­ploy­ment - they be­lieve an­other rate cut is likely, ei­ther in Novem­ber or in Fe­bru­ary.

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