Econosights: How are consumers responding to higher interest rates? | AMP Capital

Econosights: How are consumers responding to higher interest rates? Key points Consumers are responding to higher interest rates: housing market indicators are slowing (home price declines have accelerated and auction clearance rates are falling), consumer sentiment is weakening and retail spending is slowing. This is the expected consumer response as interest rates rise. The RBA wants to see slowing economic activity to reduce current inflation and inflation expectations. The concern is around too many rate …

The RBA hikes rates again with more to go – but falling confidence and home prices will limit RBA tightening | AMP Capital

The RBA hikes rates again with more to go – but falling confidence and home prices will limit RBA tightening Key points The RBA has hiked the cash rate again – by 0.5% taking it to 0.85% and continues to signal more rate hikes ahead. We expect the cash rate to rise to 1.5-2% by year-end and to peak at 2-2.5% by mid next year. Greater sensitivity to higher interest rates will cap how much …

Market Update 20 May 2022 | AMP Capital

Market Update 20 May 2022 Investment markets & key developments It was another volatile weak in share markets with worries that rate hikes, cost pressures and Chinese supply disruptions would hit profits after downgrades from some US retailers and tech stocks. This left US and Eurozone shares down, but Japanese, Chinese and Australian shares rose helped by monetary easing in China. In Australia gains in IT, utility and material shares more than offset falls in …

The RBA starts raising rates – how far and how fast? And what does it mean for investors? | AMP Capital

The RBA starts raising rates – how far and how fast? And what does it mean for investors? Key points The RBA has hiked the cash rate by 0.25% taking it to 0.35% and signalling more rate hikes ahead. We expect the cash rate to rise to 1.5% by year-end and to 2% by mid next year. But the RBA will only raise rates as far as necessary to cool inflation and high household debt …

Why Australian interest rates are likely to rise and when

Why Australian interest rates are likely to rise and when Senior economist Diana Mousina answers our questions on potential interest rate changes and what it could mean for Aussie households. Why have interest rates been so low for so long? The main reason interest rates have been kept so low is the Reserve Bank of Australia undershooting on its inflation target of 2-3%. We haven’t seen underlying or core inflation within that band sustainably since …

The RBA ends bond buying – but remains “patient” on rates. We expect the first rate hike in August | AMP Capital

The RBA ends bond buying – but remains “patient” on rates. We expect the first rate hike in August   Key Points The RBA will end quantitative easing this month. While it now sees unemployment falling below 4% and higher inflation it is prepared to be “patient” for now. We expect rate hikes to commence in August. Ultimately, we see the cash rate rising to around 1.5 to 2% in the years ahead but it’s …

RBA on hold and likely to remain easy for a long while yet as full employment gets more of a look in | AMP Capital

RBA on hold and likely to remain easy for a long while yet as full employment gets more of a look in Key points The RBA left the cash rate at 0.1% at its April meeting. While the economy is recovering faster than expected the conditions for a rate hike – actual inflation sustainably in the 2-3% target zone and wages growth well above 3% – are unlikely to be met for several years. The …

Mixed outlook for Australian housing amid prolonged pandemic

  Mixed outlook for Australian housing amid prolonged pandemic   A relatively high rate of unemployment across the nation, coupled with a freeze on immigration, and consequently population growth, might ordinarily spell bad news for the housing market. Instead, Australian capital city average dwelling prices rose 0.2% in October, according to CoreLogic, the first monthly gain since April and hot on the heels of a cumulative contraction of almost 3% between April and September. Prices …

Covid-19: Is now the right time to downsize my property? | Q&AMP

As a result of COVID-19 and the rising unemployment rate, many Australians have questions about their retirement and savings, especially whether it’s a good idea to downsize your home right now. AMP Capital senior economist Diana Mousina and financial adviser John Dani discuss downsizing your home in the current state of the residential property market. Watch for an outlook on Australian property prices, the main reasons for selling your home and downsizing, and the key …

Econosights: The impact of Covid-19 on the Australian labour market | AMP Capital

Econosights: The impact of Covid-19 on the Australian labour market Key points Most industries are feeling some negative impact from the coronavirus disruption via reduced employee hours, wage cuts, stood down workers or permanent staff reductions. On our estimates, around 41% of jobs are at a high risk of lower work hours, being stood down or terminated. However, the Federal Government’s well designed JobKeeper wage subsidy scheme should see most of these employees kept in …