I have been lucky enough to attend two Presentations from economists from ING Direct and Macquarie Bank over the past fortnight.
Interestingly both had a similar view on the RBA cash rate in that both indicated they really didn’t see any movement in the cash rate until well into 2018. Primary reasons acknowledged the fact that most lenders have been moving their rates independently of the Reserve Bank and the need to watch the Aussie exchange rate.
This ties in with my personal view on Owner Occupied Fixed rates which remain in the high 3.00% range to mid 4.00% range for 3 to 5 year fixed rates. That would indicate to me that the financial markets really aren’t factoring in much rate movement at all in the short to medium term. Time will tell.
What impact will the new tax on the 5 major banks have on rates? Well someone has to pay so I suspect a combination of rate movements for both deposit holders and anyone with loans – both consumer and business lending - to these entities and a reduction in dividends to shareholders. End result (noting nearly everyone has super that would have some holding in the major banks) everyone pays.