How much longer will Interest Rates stay where they are?

November 10, 2017
Jim Demetriou

Analysts curb their enthusiasm for Interest Rate Hikes.

The impact of a flat retail sales growth in September may have an curbing effect on any interest rate increase during 2018. The professional markets propose the implied cash rate as of August 2018 has dropped to 1.57% from 1.63% which means the expectation of a rate increase has curtailed. This is supported by the future markets anticipation that the Reserve Bank hike isn't taken into consideration until May 2019 or the earliest December 2018.

The Australian Institute of Company Directors Chief economist, Stephen Walters suggests that the Reserve Bank is trimming its expectations for growth as households are facing higher power bills and low wage growth. Any rate increase will put further pressure on spending. 

The question then still remains how much longer rates will stay where they are? History hints that interest rate stability lasts for no longer than 18 months but there is some way to go before there are any clear indicators when rates will go up.

Take advantage of the low rate environment by getting a better deal on your home loan. Call Jim Demetriou at Mortgage Choice on 9525 0112 who will provide you expert Mortgage advice.

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