I discussed the broader context of the possible RBA Cash rate cut on ABC Illawarra.
RBA Rate Cut? Radio Discussion
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I discussed the broader context of the possible RBA Cash rate cut on ABC Illawarra.
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– I continue to think that the RBA follows (the) short term rate(s).
– And those short term rates aren determined by a force called “Mr. Market”. When Mr. Market feels very confident then he will push (short term) rates higher. When Mr. Market is concerned about the way the (australian) economy is going then he will push rates lower.
– In that regard, short term rates are a VERY good gauge of how confident investors are.
– If the current government is going to dole out taxcuts then who is going to benefit the most ? I fear that the high income earners and the corporate sector are going to benefit the most. Just like in the US where some 90% of all the taxcuts benefited the corporate sector. If a taxcut is supposed to help the economy then those taxcuts should benefit the lower income brackets the most. Those people are most likely to spend their increased income.