RBA MUST RAISE RATES, SAYS QUT

Written on the 17 September 2014

RBA MUST RAISE RATES, SAYS QUT

THE Reserve Bank must raise the official cash rate in coming months before the housing market enters a full boom or bust cycle, according to QUT.

QUT financial economist Dr David Willis says inflated prices and high clearance rates has caused the property market to enter a “bubble.”

“Leaving rates on hold through the summer will allow the housing market to potentially enter into a full boom, which would need significant monetary policy change to bring it from the boil,” Willis says.

“I am calling a rise in either October or November at the latest, because I think the RBA will realise they need to act before it’s too late.”

The cash rate has been on hold at 2.5 per cent since August last year, with the Australian dollar recently falling to US 90 cents.

“This is an opportunity for the RBA to take advantage of the lower currency to start getting rates back to somewhere near normal before the next recession or crisis hits.

“Higher interest rates would allow the RBA to support the economy again, an ability it is lacking right now.

“And the lower currency rates will provide significant export opportunities for our soft and hard commodities,” he says.

Dr Willis says lower currency rates could potentially lead to a spike in inflation as imports rise, but a rate rise would help the economy adjust to it.


Latest News

ADELAIDE DIGITAL MARKETING GURUS CHANGING THE FACE OF ONLINE RETAILING

Frank Grasso, CEO of Adelaide based Dynamic Creative, believes his company's new software will revolutionise Adwo...

WHY A JUNIOR MINER DECIDED TO JOIN THE RANKS OF THE HOT POT STOCKS

USUALLY, when a relatively unknown explorer experiences a sharp spike in its share price, it means they've fou...

1700 BRISBANE APARTMENTS NOW MANAGED BY FORTUNE 500 COMPANY JLL

MULTINATIONAL and Fortune 500 company JLL (NYSE: JLL) has expanded its Australian dominance in the property managemen...

HARVEY NORMAN HITS OUT AT 'FALSE NEWS' OF ASIC INVESTIGATION

RETAIL giant Harvey Norman (ASX: HVN) has vehemently rejected reports its accounts are under investigation by ASIC, s...

Related News

RAY OF HOPE FOR SLATER AND GORDON AS LENDERS STEP IN

EMBATTLED law firm Slater and Gordon (ASX: SGH) has announced to the ASX that it has launched confidential discussion...

SPROUTX PROVIDES THE SEED FOR AGTECH STARTUPS

AGTECH innovation fund SproutX has opened applications for its first accelerator round, backed by $10 million from...

GAS PRICES MAY FORCE BRICKWORKS TO TAKE MANUFACTURING OVERSEAS

BRICKWORKS Limited (ASX:BKW) chairman Robert Millner says soaring energy prices may force the company to turn to offs...

CHINA CONTINUES TO COLLECT AUSSIE PROPERTY ASSETS

CHINESE coin continues to dominate Australia's offshore real estate investment market, accounting for almost h...

EVENTS COMING UP

 

Contact us

Email News Update Sign Up Contact Details
Subscriptions

PO Box 2087
Brisbane QLD 4001

LoginTell a FriendSign Up to Newsletter