- November 1, 2010
- Posted by: admin
- Category: Interest rate
The RBA is should hold rates when it meets tomorrow.
Last week’s soft data is encouraging the Board to keep rates on hold. Underlying inflation came in below expectations, while credit data was also weak – with business lending particularly soft.
Underlying inflation for the year to September eased to a five year low of 2.4 per cent – dropping to the bottom half of the RBA’s 2 to 3 per cent target band.
Based on these results, the Board should wait longer for more data to validate their medium term forecast.
As soon as there is evidence the economy is growing above trend again they will hike the rate. A fall in the unemployment rate through 5 per cent on November 11 would satisfy this criteria and make a December 7 rate hike likely.
It would appear we as mortgage holders a safe for this month.