Financial expert Mark Bouris has predicted the Reserve Bank of Australia will ‘absolutely’ pause interest rates when it meets in Sydney on Tuesday.
The Chairman of Yellow Brick Road Home Loans said he was confident in his forecast after annual inflation fell from 5.4 percent to 4.9 percent in July.
“That’s very encouraging,” Bouris told Sunrise ahead of the RBA meeting.
“That’s one of the lowest numbers we’ve had in a long time. Good stuff.’
Outgoing Governor Philip Lowe chose to pause cash interest in August at an 11-year high of 4.1 percent. This was the second month in a row that interest rates were suspended.
Australian businessman Mark Bouris (pictured with model Monika Radulovic in 2016) said interest rates would start falling in June or July next year
Outgoing Governor Philip Lowe chose to pause cash interest in August at an 11-year high of 4.1 percent. This was the second month in a row that interest rates were suspended
Host Nat Barr asked the finance guru how long he thought interest rates would hold. Bouris responded with a message of hope for many Australians.
“Unless something weird happens with the inflation rate, we’re not going to have a rate hike if we get a huge spike — which I doubt will happen given the trend —,” he said.
“In terms of when a rate cut will happen, I think they’re going to have a hard time making sure they teach us a lesson about not overspending or overpaying and getting our household expenses under control for a while. to hold.
The money market generally expects the start of interest rate cuts around July, August, let’s say around this time next year.
“So we’re looking at a year from our current rate, then some relief after that.”
Bouris said the government has done “little” to curb rising inflation.
“They have done nothing but scale back their spending or scale back their commitments for new spending,” he said.
The financial expert said the government could use targeted taxes, such as those on cigarettes, to initially raise the price of an item.
“It puts you off buying it at that price because it’s too expensive,” he explained.
‘Fiscal policy is about curbing behaviour.’
Financial expert Mark Bouris has predicted that the Reserve Bank of Australia will ‘definitely’ pause interest rates at its meeting Tuesday in Sydney.
He said outgoing RBA governor Phillip Lowe would have liked governments to work more closely with the monetary policy for which the RBA is responsible.
The Australian Bureau of Statistics revealed last week that inflation had risen by 4.9 percent over the past year to July 2023 – the lowest level since February 2022.
The monthly increase was below market expectations of 5.2 percent for July.
“This month’s annual increase of 4.9 percent is lower than June’s 5.4 percent,” said Michelle Marquardt, head of price statistics at ABS.
“Annual price increases continue to decline from the peak of 8.4 percent in December 2022.”
Prices for gasoline, fruits and vegetables have fallen over the past year as electricity and gas bills have skyrocketed and rents have continued to rise, the new ABS figures show.
Mr Lowe (right) will chair his final board meeting as RBA governor on Tuesday before handing over to his deputy Michele Bullock (left) on September 18, after imposing the toughest rate hikes since 1989.
Despite a weaker Australian dollar, petrol prices fell 7.6 per cent over the year following some moves in crude oil prices that have pushed unleaded prices back below $1.90 a liter in the capitals.
Prices for fruit and vegetables fell by 5.4 percent annually, but prices for bread and cereals rose by 9.9 percent, while prices for dairy products rose by 12.7 percent.
Housing costs are still rising, with rents rising by 7.6 per cent over the year due to an influx of international students to Sydney and Melbourne.
Electricity prices rose 15.7 percent despite energy bill relief measures that saw eligible households in NSW, South Australia and Tasmania receive $500 in rebates as part of a federal government program in partnership with the states and territories.
Mr Lowe will chair his last board meeting as RBA governor on Tuesday before handing power to his deputy Michele Bullock on September 18 after imposing the toughest rate hikes since 1989.
The Australian Securities Exchange futures market sees interest rates unchanged this afternoon as an 86 percent chance, while a rate cut is seen as a 14 percent chance.
The 30-day interbank futures market isn’t even betting on a rate hike.