US inflation is surging and rates will rise in March, so how long can the RBA hold fire here?

Along with the shock of the first rate rise in about a dozen years, he noted that the increase in the level of debt was expected to make household spending — and the 60-odd per cent of the economy based on it — much more sensitive to rate rises.

"The level of household debt relative to income is at a record high. So, the stock of debt that the higher interest rates will apply to has increased," he observed.However, he added that, during the pandemic, Australians had built up about $250 billion in extra savings than they had before COVID-19, including a lot of home owners with mortgages.

"Three years ago, the median borrower had a buffer equivalent to one year's interest and mortgage repayments, today the median borrower has a buffer of more than two years' mortgage payments," he noted.But for the tens of thousands of mainly recent borrowers who have a much smaller, or no, buffer on their mortgage, the acid test will come when the RBA hits go on its first rate rise.

Dr Lowe said rate rises would only happen when the economy was strong, unemployment was low and wages were growing solidly, meaning most borrowers should have higher incomes to cover their rising mortgage outlays. The other hope will be that the bank regulator, APRA, and the institutions it regulates have been factoring in sufficient buffers to ensure borrowers can cope with the eventual rise in mortgage costs.Posted

Vote Biden again to solve the problem.

After the election.

Until after the election or they are told by the lnp! Independent?

LET'S GO BRANDON

The trade deficit numbers are the latest solid evidence that the US is highly dependent on other countries, particularly China

Oregon late A.G. Frohnmayer'd deleted all records in L.C. It shows I'd changed my name to Nadia Sindi.Lift my old name Faika M. Sindi.Changed first letters of my old name to Saika Findi!Trapped me in a criminal record since 1987!

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Lowe warns of ‘abrupt’ effect from US rate risesThe RBA boss has cautioned that financial markets are at risk of an sudden adjustment if surging US inflation forced the Fed to raise interest rates faster. From what I've been seeing he's giving good advise. The international markets have been very jittery this year..
Source: FinancialReview - 🏆 2. / 90 Read more »