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Cash Rate Remains at 1.75%, but who makes the decisions and why?

8/6/2016

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So every month, the Reserve Bank Of Australia meets, and reviews the official cash rate, which in turn, effects us all, in our home loan interest rates, savings account returns and our projections as to how hard we can make our money work in moving forward. But, what are the factors that the Reserve Bank considers in making such decisions? Want to understand more? Read on :)
Media ReleaseStatement by Glenn Stevens, Governor:
Monetary Policy Decision
Number2016-16

Date7 June 2016At its meeting today, the Board decided to leave the cash rate unchanged at 1.75 per cent.

The global economy is continuing to grow, at a lower than average pace. Several advanced economies have recorded improved conditions over the past year, but conditions have become more difficult for a number of emerging market economies. China's growth rate moderated further in the first part of the year, though recent actions by Chinese policymakers are supporting the near-term outlook.

Commodity prices are above recent lows, but this follows very substantial declines over the past couple of years. Australia's terms of trade remain much lower than they had been in recent years.
In financial markets, conditions have generally been calmer for the past several months following the period of volatility early in the year. Attention is now turning to some particular event risks. Funding costs for high-quality borrowers remain very low and, globally, monetary policy remains remarkably accommodative.

In Australia, recent data suggest overall growth is continuing, despite a very large decline in business investment. Other areas of domestic demand, as well as exports, have been expanding at a pace at or above trend. Labour market indicators have been more mixed of late, but are consistent with continued expansion of employment in the near term.

Inflation has been quite low. Given very subdued growth in labour costs and very low cost pressures elsewhere in the world, this is expected to remain the case for some time.

Low interest rates have been supporting domestic demand and the lower exchange rate overall is helping the traded sector. Over the past year, growth in credit to businesses has picked up, even as that to households has moderated a little. These factors are all assisting the economy to make the necessary economic adjustments, though an appreciating exchange rate could complicate this.

Indications are that the effects of supervisory measures have strengthened lending standards in the housing market. Separately, a number of lenders are also taking a more cautious attitude to lending in certain segments. Dwelling prices have begun to rise again recently. But considerable supply of apartments is scheduled to come on stream over the next couple of years, particularly in the eastern capital cities.

Taking account of the available information, and having eased monetary policy at its May meeting, the Board judged that holding the stance of policy unchanged at this meeting would be consistent with sustainable growth in the economy and inflation returning to target over time.

Much thanks to the RBA for the article: http://www.rba.gov.au/media-releases/2016/mr-16-16.html
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Market update and where to from here?

1/6/2016

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Picture
As many are you are aware, nearly all of the banks have now passed on interest rate reductions following the Reserve Bank's decision to cut interest rates by 0.25% at the last review of the official cash rate, but not all of them have passed on the full cash rate reduction.

At Get Smart, our team are in the process of reviewing all of our client loans, to make sure that their home loans are running as efficiently as possible, and making sure that we have negotiated the lowest possible rate with each provider for each and every client.

At Get Smart, it's personal, and we know it's our job to make sure we are crossing the T's and dotting the I's so you can get on with what you do best while we do the same... After all, I'm never going to be able to rewire an electrical box, and quite frankly, we don't expect you have the time to chase the banks... so we do the hard work for you.

Not getting the Get Smart treatment with your existing provider? It happens, give us a call, and we will happily point you in the right direction and provide you a free and current home loan health check.

At Get Smart, we want to help you keep control of your home loan repayments rather than them controlling you with the best loan options and advice. 

You have the power and we have the knowledge to ensure you have the best rate and home loan to suit your needs.

Feel free to give us a call to discuss further.

For the home owner we still have variable rates at 3.79%, and fixed rates from 3.69%

For the Investor, we have variable rates from 4.09%, and fixed rates from 3.79%

Want to understand more? Call us :)
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