Aust. low inflation & RBA meeting 03 April 2012

[Timmy]

The TD Securities – Melbourne Institute monthly inflation gauge rose 1.8 per cent in the year to March, slowing from the 2 per cent pace in the year to February. That's the lowest reading since October 2009.

http://www.smh.com.au/business/weak-inflation-may-fan-rate-cut-hopes-20120402-1w7el.html

With such a low measure of inflation, what's to stop an RBA rate cut?
That's not the expectation (no change is the consensus) ... any thoughts?

 

[skc]

Re: Aust. low inflation & RBA meeting 03APR2012

http://www.smh.com.au/business/weak-inflation-may-fan-rate-cut-hopes-20120402-1w7el.html

With such a low measure of inflation, what's to stop an RBA rate cut?
That's not the expectation (no change is the consensus) ... any thoughts?

What can a rate cut achieve if the banks don't pass on the cut to borrowers?

Serious question!

 

[tinhat]

Re: Aust. low inflation & RBA meeting 03APR2012

What can a rate cut achieve if the banks don't pass on the cut to borrowers?

Serious question!

They won't cut rates IMHO. The Guv's attitude I believe will be that inflation is broadly within the target range which, if it remains so, will afford the RBA the opportunity to lower rates should it there be a deterioration in economic conditions in the future. IMHO, that may be the case after the federal budget.

As for what a rate cut can achieve if the banks don't pass it on? More willingness to lend to business due to better margins?

 

[notting]

Re: Aust. low inflation & RBA meeting 03APR2012

What can a rate cut achieve if the banks don't pass on the cut to borrowers?

Serious question!

A 50 basis point cut might achieve a 25 point cut from the banks and a break out through 4360!! Is not going to happen but probably should.
If we are not going to be selling as much Iron ore etc government is going to have a bit of a deficit problem if they can't pump the rest of the economy a bit!

 

[DB008]

Re: Aust. low inflation & RBA meeting 03APR2012

A rate cut would be nice.
The banks wouldn't pass on the full rate cut though.

 

[Starcraftmazter]

Re: Aust. low inflation & RBA meeting 03APR2012

They won't cut rates, they are already pretty low. The RBA will want to see how fast house prices continue dropping, and they will only lower rates if they house price falls accelerate to uncomfortable levels for them.

 

[Julia]

Re: Aust. low inflation & RBA meeting 03APR2012

A rate cut would be nice.

No, it wouldn't. Might be good to remember the position of depositors also.
Only about a third of the population have mortgages.
Fortunately, the competition for deposit funds by the banks seems to be keeping rates for deposits at a reasonable level.

 

[Starcraftmazter]

Re: Aust. low inflation & RBA meeting 03APR2012

Unchanged as predicted. AUDUSD jumped by 0.6 cents before dropping twice as much. Amazing spectacle

 

[young-gun]

Re: Aust. low inflation & RBA meeting 03APR2012

http://www.smh.com.au/business/weak-inflation-may-fan-rate-cut-hopes-20120402-1w7el.html

With such a low measure of inflation, what's to stop an RBA rate cut?
That's not the expectation (no change is the consensus) ... any thoughts?

the way inflation is calculated im surprised it has any bearing at all on the rba's decision. its so twisted and warped its almost pointless calculating it at all.