The RBNZ Team lead by Adrian Orr was questioned in Parliament today, and we got more insight into the trajectory of rates, and the impact on households, with the debt servicing ratios set to rise higher than before the GFC! There was a sharp intake of breath!
In addition, there was a concession to the fact that if lending had been tighter, QE and money printing more controlled, then inflation would be lower. Is this the first time a Central Banker admitted this?
http://www.martinnorth.com/
Go to the Walk The World Universe at https://walktheworld.com.au/
Adrian Orr, RBNZ Governor said they were listing the Official Cash Rate by 0.5% today, with a peak of 5.5% still on the cards. The recent Cyclone may also add additional inflationary pressure.
He also highlighted the importance of cash – and branches – at a time of crisis, like when the power goes out. And the risks to social cohesion when this is ignored. Just wow!
http://www.martinnorth.com/
Go to the Walk The World Universe at https://walktheworld.com.au/
The RBA minutes today revealed they considered both 50 and 25 basis points rate hikes at their last meeting – but no thought of holding rates. So it was not a close decision, the RBA turned more hawkish.
And more rate hikes must be expected, while inflation won’t drop into 2-3% range until 2025.
So expect more rate hikes and higher for longer, with a following fall in wealth and output. This all aligned with the Governor’s comments last week to Parliament.
http://www.martinnorth.com/
Go to the Walk The World Universe at https://walktheworld.com.au/
The RBA Governor was before the Economics Committee in Parliament last Friday. Questions from members were more coherent, but the responses were similar to those in the Senate on Wednesday.
Two points of note were the distribution of debt (and so pain) across the community, and the question of whether the rate of increases mattered more than the end destination.
But I was not convinced by their answers…
http://www.martinnorth.com/
Go to the Walk The World Universe at https://walktheworld.com.au/
We are in an era of complexity – yet some claim there are simple answers out there. We think this is untrue. The complexity is real, and some scenarios are very complex. So beware the “simple” solution!
http://www.martinnorth.com/
Go to the Walk The World Universe at https://walktheworld.com.au/
In the latest edition of our weekly update, we look across the markets and reflect on how households are being pushed under the bus by higher rates, and as the expectation for yet higher rates (and for longer) takes hold.
Locally the first signs of stress are showing on the banks.
CONTENT
0:00 Start
0:15 Introduction
1:00 US Markets
5:05 US Households And Debt
6:55 Oil and Gas
8:23 Europe
10:17 Asia
12:18 Australia
14:00 Bank Margins And Rising Exposures
21:00 RBA Under The Microscope
26:30 Crypto
26:40 Conclusion And Close
The latest edition of our finance and property news digest with a distinctively Australian flavour.
http://www.martinnorth.com/
Go to the Walk The World Universe at https://walktheworld.com.au/
The latest US inflation data suggests inflation is more intractable than the markets were hoping. So what are the consequences for rates and markets in the months ahead.
Opinion is divided, but more analysts are forecasting higher rates and for longer, and are becoming more aligned to the FED’s position.
http://www.martinnorth.com/
Go to the Walk The World Universe at https://walktheworld.com.au/
This is an edited version of a live discussion about the state of play relating to the Australian economy, housing and finances with Leith van Onselen, Chief Economist at Nucleus Wealth and Co-founder of Macrobusiness.
Where are interest rates headed, and what will the fall out be?
Go to the Walk The World Universe at https://walktheworld.com.au/
Digital Finance Analytics (DFA) Blog
DFA Live Q&A: HD Replay Leith van Onselen: Economics Now
