The RBA warning Aussies will be issued

After a week of chilling warnings for homeowners, millions of eyes will be on the RBA on Tuesday. And an expert revealed what will happen.The promise of any relief coming for borrowers seems to be pushed back with every coming day.

“More generally with spending decisions people might think ‘OK I kind of went through this so far with my mortgage maybe I can spend a bit more because it looks like rates are coming down’. And then suddenly they’re saying ‘it might go up’ — it’s going to change people’s spending habits.”“Look, it’s possible,” he said.“My conclusion is that I think the RBA is going to stand back — that a hike would be an over-reaction.

Dr Oliver said that while some nations like Canada and some European countries were on track to reduce rates in the near-term — Australia, like the US, were finding it more difficult to tackle inflation. This means inflation in Australia is largely due to a handful of items, which the RBA doesn’t have a lot of influence on.

The OECD also raised its forecast for the second biggest economy, China, to 4.9 per cent from 4.7 per cent previously, thanks notably to an expansionary budgetary policy. The US Federal Reserve and the European Central Bank have frozen their rates and markets are hoping to see cuts in the coming months as inflation has eased.

Source: Loan Digest (loandigest.net)

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