Credit growth was surprisingly strong in May, rising to 9 per cent over the year (and with broad money growing at a double-digit pace).
Business credit fired the result, up by 12.9 per cent over the year following another strong result.
Housing credit growth held the line at 7.93 per cent, but is now rolling over.
And indeed, it's the accelerating in housing credit growth which tends to move markets, and it's now...decelerating.
A couple of brief observations.
Firstly, investors are coming back into the market as an inflation hedge, corroborating what leading mortgage brokers and buyer's agents have told me (see the forthcoming podcast chat with Cate Bakos).
And secondly, the environment is very different from the 2018-2019 Hayne credit crunch, when it became almost impossible to see a loan written on a timely basis.
In the current environment you can still borrow at around 3 per cent if you want to, without the absurd forensics which were happening back then.
Or, you choose to can wait and buy later.
Either way, consumers can borrow, and credit is flowing relatively freely this time around.
Ergo, bring on the rate hikes and let's get the job on inflation done!
It does seem as though lower commodity prices, freight charges, and second hand good prices are all on the way in good time.
But before then we may have another 6 to 9 months of tightening to pull services inflation into line, and while labour force imbalances also sort themselves out.
The rates hysteria seems to be subsiding in any case.
The 3-year bond yield has dropped from 3.76 per cent a fortnight ago, to under 3 per cent.
There's been a lot of hyperbolic talk about where rates 'might' get to, but that particular tide now going appears to be going back out.
Economists are looking for a terminal cash rate of about 2.5 per cent, which intuitively makes a lot more sense.
Source: Bloomberg Finance L.P.
I discussed a similar viewpoint here at Livewire markets this week.
