Today’s decision to leave the nation’s official cash rate on hold at 1.5% marks the 18th consecutive month that the cash rate has been left untouched at this historically low setting.
The latest economic data supports the RBA board’s decision to keep the rate on hold. Global and domestic conditions are showing positive signs.
In Australia, the unemployment rate is sitting at 5.5%, which is notionally full employment.
Moreover, both consumer sentiment and business sentiment have been tracking higher in recent weeks.
According to the Westpac Melbourne Institute of Consumer Sentiment, confidence climbed 1.8% higher throughout January so that optimists once again outnumbered pessimists.
National Australia Bank’s Monthly Business Survey found business confidence is buoyant and currently sitting at its highest level since July 2017.
Globally, the Federal Reserve Bank in the United States appears to be confident about the state of their economy, lifting their cash rate three times throughout 2017.
These positive signs in both our economy and abroad would suggest the Reserve Bank’s approach to monetary policy is working.
That being said, all indications would suggest that the cash rate is unlikely to stay at the current historically low setting indefinitely.
If the economy continues on its current trajectory, with consumer and business sentiment showing positive signs, there is no reason why the RBA wouldn’t lift rates.
Of course, as and when that happens, it’s important that both borrowers and future buyers are aware that interest rates will continue to sit at low levels, with many lenders continuing to offer competitive rates.
If you’re looking to buy your first, or next property this year, now is a great time to speak to your local Mortgage Choice broker.
So what are you waiting for? Give us a call today and let us help you achieve all of your property ambitions.