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Co-founder & CEO of AllenWargent property market & hedge fund advisory.
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Co-founder & CEO of AllenWargent property advisory, 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.
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Tuesday, 15 April 2014
RBA: Rates on hold for some time
Following on from my short post on the likely future direction of interest rates, the Reserve Bank released its Board Minutes for April this morning. Let's take a look at a few highlights.
Firstly, all fairly sanguine on housing markets:
"Housing market conditions remained strong, with housing prices rising in March to be 10½ per cent higher over the year on a nationwide basis. Members noted that dwelling investment had increased moderately in the December quarter, with a pick-up in renovation activity, and that the high level of dwelling approvals in recent months foreshadowed a strong expansion in dwelling investment."
On strengthening retail:
"Members observed that more recent economic indicators had generally been positive. Retail sales had increased by 1.2 per cent in January, continuing the pick-up in momentum that began in mid 2013."
On wages and inflation:
"Information on wages pointed to moderate growth, which was expected to help contain domestic inflationary pressures."
This is good as it relieves pressure to hike rates sooner than the bank might want. And on the wider economy and booming exports:
"Members recalled that the national accounts reported that GDP rose by 0.8 per cent in the December quarter and by 2.8 per cent over the year, which was a little stronger than had been expected. In the quarter, there had been further strong growth of resource exports, while growth in consumption and dwelling investment picked up a little and business investment declined."
And it is steady as she goes for interest rates:
"At recent meetings, the Board had judged that it was prudent to leave the cash rate unchanged and members noted that the cash rate could remain at its current level for some time if the economy was to evolve broadly as expected. Developments over the past month had not changed that assessment."
Overall, the bank seems to be quite happy that low interest rates are stimulating the economy as planned, with some more lifting for them to do yet.