RBA interest rates live updates: All the latest news from the Reserve Bank’s December board meeting
If you’ve tuned in hoping against hope for a Christmas miracle on interest rates, look away now. We’re afraid those grinches at the Reserve Bank have none to give.
The sack is empty, the candy canes and cookies are all gone and no-one even bothered to untangle the lights this year. (But, just to rub a little extra Christmas ham salt into those gaping financial wounds, that bloody Mariah Carey song is still on the radio).
In fairness, we shouldn’t have dared to dream. The writing has been on the wall for some time ... for most of the year in fact. For anyone with a mortgage, it’s nothing but big lumps of something a whole lot dirtier than coal this Christmas.
At least the bad news will be served with a smile from head elf Michele Bullock when she steps out to address the media later today.
Turning our Economics 101 textbooks to Chapter 3, we can see that in times of financial strife, an economy’s jobless rate goes up which helps to keep a lid on overall spending. That then eventually forces the central bank to loosen its grip on credit and things slowly get a little better.
That’s the theory anyway. But there’s not much evidence of that here right now. More than a year of the official cash rate treading water at 4.35 per cent has barely made a dent in Australia’s stubbornly low level of unemployment.
That resilience — coupled with an inflation rate that is now within the RBA’s preferred sweet spot of between 2 and 3 per cent, but not yet sustainably so — means the chance of a move on rates today is about as likely as Santa putting Donald Trump on the nice list this year.
The board also continues to say it can’t rule out a rate rise ... but again, no one genuinely believes that’s a possibility right now.
So, with no Christmas joy in sight, what’s next?
Our brightest financial minds have pushed expectations of a rate cut out to the middle of next year, certainly not the February target many had forecast earlier this year.
The best we can hope for is that the numbers keep going our way.
Just like every family who’ll endure that one creepy uncle who’s life peaked in the 70s and he still thinks there’s nothing wrong with a little casual sexism scattered among the cold meat, prawns and pavlova this Christmas lunch, we could all just use a f..king break.
Key Events
And that’s 13 months of no rate relief!
As expected, the RBA has held the official cash rate at 4.35 per cent, signalling it is not yet comfortable that inflation is under control.
That’s now more than a year of no relief for homeowners, with most tipping it’s still up to at least five months away.
Five minutes to go!
After months of posturing, could the RBA now declare it is comfortable with inflation - or or at least be confident enough it will keep trending down and it can now offer some long awaited support for anyone with a mortgage?
NAB reveals it will scrap passwords
The future of NAB’s online banking is set to pivot from passwords to passkeys and biometric recognition technology.
The major bank revealed it would move away from passwords, calling the notoriously weak cybersecurity measures that fail to consistently an onslaught of cyberattacks.
The bank’s digital subsidiary ubank can already be unlocked with a passkey, and NAB said its online bank would operate similarly in this way within the next few years.
Over to you, Shane ...
In times of uncertainly, we look to the wisest among us for a sign ...
Start the countdown!
We’re now just over 30 minutes aware from knowing whether we can splash a little extra cash this Christmas courtesy of an RBA rate cut.
Time to fix your home loan?
Many fixed interest rates are at least one per cent lower than variable rates right now, offering a level of certainty and savings that shouldn’t be overlooked.
Borrowers may be treading water as they wait on the first rate cut from the RBA, but one lending expert believes fixed rates are worth a second look amid the uncertainty.
Julian Finch, founder of Finch Financial, is urging households suffering under the weight of high interest rates to reach out to a lending expert for assistance.
“Many people are not aware that fixed interest rates are still incredibly attractive and multiple lenders are offering very good rates at the moment on fixed interest rate loans,” he said.
“What I am saying is that people don’t have to live with high interest rates, there are things you can do to tinker with your home loan to relieve the financial pressure and stress. Fixed interest rates are an ideal option.”
Finch suggested a split loan - with one still exposed to variable rates - “balances flexibility with financial security”.
CBA holds the line on February cut
Commonwealth Bank is now the only big four bank forecasting a February start, with the remaining three predicting May
CBA head of Australian economics Gareth Aird said economic data had either been softer or in line with RBA forecasts, with last week’s national accounts showcasing the slowest rate of annual growth in GDP in more than three decades, outside the pandemic.
“The data confirmed that the income boost provided by the stage three tax cuts did not generate a commensurate spending response by the household sector,” he said.
“Weakness on the consumer spending front puts downward pressure on growth in consumer prices.”
Mr Aird was expecting little change in the RBA’s assertive language in the post-meeting statement and press conference.
“We think that the statement accompanying the December on‑hold decision is likely to reiterate that ‘the board is not ruling anything in or out’,” he said
Here’s how to save this Christmas ...
Ah, Christmas. The time of year when your to-do list rivals Santa’s, and there are elves everywhere you look — on shelves, Facebook feeds and, if you’re a parent, they even haunt your dreams.
But there’s one place you don’t want that mischievous elf sneaking around, and that’s in your finances.
As we deck the halls and juggle endless lists, it’s easy to let our finances slip away like glitter from the vacuum cleaner.
But this year, let’s make a new tradition — a stress-free holiday.
Read the full story here ...
Mining gains not enough to keep ASX in the black
The Australian share market is down 0.6 per cent at 10.30am as punters wait on the RBA’s call on rates.
Huge gains from miners on the possibility of a big surge in Chinese stimulus measures were offset by a near-5 per cent dive in IT stocks, the banks, telcos and consumer-focused companies.
The ASX200 was at 8370.6.
Jobs in high demand
The thorn in the RBA’s side is Australia’s robust jobs market.
Since late 2021, it has hovered at just above or just below 4 per cent - hitting a record low of 3.5 per cent in July 2022 as businesses rushed to fill vacancies after the pandemic.
It has rise by just 0.6 percentage points since then and in October stood at 4.1 per cent - still well off pre-COVID levels of about 6 per cent.
And, according to recruitment site Seek, there’s still plenty of demand in the market, including in the healthcare and social assistance industry, but also in the information and communication technology, transport and logistics and retail and hospitality sectors
Originally published on The West Australian
