Pete Wargent blogspot

Co-founder & CEO of AllenWargent property advisory & buyer's agents, offices in Brisbane (Riverside) & Sydney (Martin Place) - clients include hedge funds, resi funds, & private investors.

4 x finance/investment author - 'Get a Financial Grip: a simple plan for financial freedom’ (2012) rated Top 10 finance books by Money Magazine & Dymocks.

"Unfortunately so much commentary is self-serving or sensationalist. Pete Wargent shines through with his clear, sober & dispassionate analysis of the housing market, which is so valuable. Pete drills into the facts & unlocks the details that others gloss over in their rush to get a headline. On housing Pete is a must read, must follow - he is one of the better property analysts in Australia" - Stephen Koukoulas, MD of Market Economics, former Senior Economics Adviser to Prime Minister Gillard.

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"I've been investing for over 40 years & read nearly every investment book ever written yet I still learned new concepts in his books. Pete Wargent is one of Australia's finest young financial commentators." - Michael Yardney, Australia's leading property expert, Amazon #1 best-selling author.

"The most knowledgeable person on Aussie real estate markets - Pete's work is great, loads of good data and charts, the most comprehensive analyst I follow in Australia. If you follow Australia, follow Pete Wargent" - Jonathan Tepper, Variant Perception, Global Macroeconomic Research, and author of the New York Times bestsellers 'End Game' and 'Code Red'.

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Tuesday, 21 May 2013

RBA drops hints in its Board Minutes

The Reserve Bank has released the Minutes from its May 7 Monetary Policy Board Meeting. 

Read the full release here, but the key extract is below and it hints at the RBA waiting to see what happens for a few months while retaining the option to cut the cash rate to 2.50%, perhaps by the third quarter of the year, while keeping a beady eye out for inflating asset prices:

"With inflation contained and domestic economic activity forecast to be below trend over the period ahead, the Board had maintained the cash rate at a level consistent with borrowing rates being close to previous lows. 

Increasingly, the household sector had shown signs of responding to these low rates: wealth had been bolstered by higher equity and dwelling prices; measures of consumer confidence were above average; housing and personal loan approvals had been rising, although credit growth remained subdued to date; and dwelling construction activity was growing. 

At the same time, however, conditions in the business sector, as assessed in surveys, generally had remained below average, possibly in part because the exchange rate had remained high despite lower export prices and interest rates.
For some months the Board had considered that the inflation outlook provided scope to ease monetary policy further, should that be necessary to support demand. Members recognised that the effects of the earlier reductions in interest rates were still working through the economy. Nonetheless, growth was expected to be somewhat below trend for a while, and the inflation outlook had, if anything, been revised down slightly. 
Members were conscious of the strengthening conditions in the housing market, but also noted that, thus far, credit growth had remained subdued. Taking all the factors into consideration, the Board decided that some of the scope to ease policy should be used at this meeting. It judged that a further reduction in the cash rate was appropriate to encourage sustainable growth in the economy, consistent with achieving the inflation target."