{"id":5295,"date":"2023-08-03T09:41:29","date_gmt":"2023-08-02T23:41:29","guid":{"rendered":"https:\/\/financialplus.com.au\/?p=5295"},"modified":"2023-08-03T09:42:56","modified_gmt":"2023-08-02T23:42:56","slug":"has-the-tide-turned-what-the-rba-rate-pause-means-for-homeowners","status":"publish","type":"post","link":"https:\/\/financialplus.com.au\/has-the-tide-turned-what-the-rba-rate-pause-means-for-homeowners\/","title":{"rendered":"Has the tide turned? What the RBA rate pause means for homeowners"},"content":{"rendered":"
In what many will see as better news than a Matildas\u2019 World Cup win, the\u00a0RBA held interest rates steady<\/a>\u00a0in August for the second month in a row.<\/p>\n After a relentless string of rate hikes (12 since April 2022), homeowners may be sceptical about what\u2019s happening.<\/p>\n So is the RBA board finally satisfied we\u2019ve endured enough rate hikes? Or is RBA Governor Philip Lowe saving one last rate hike for mortgage holders as a parting gift before he vacates his position next month?<\/p>\n Let\u2019s take a closer look at some of the underlying data.<\/p>\n The RBA has made it clear that it has been hiking rates to help lower inflation.<\/p>\n So it was welcome news this week when the Australian Bureau of Statistics announced that\u00a0annual inflation has dropped to 6.0%<\/a>.<\/p>\n It\u2019s fair to say most of us wouldn\u2019t normally celebrate goods and services prices rising 6% over the past year.<\/p>\n However, it\u2019s a sign that inflation is still falling from its peak of 7.8%, and that\u2019s exactly what the RBA has been aiming for.<\/p>\n The RBA knows it\u2019s treading a fine line with interest rate decisions. At its August board meeting the central bank explained why it kept interest rates in a holding pattern:<\/p>\n \u2013 It can take time for the economy to respond to previous rate hikes.<\/p>\n \u2013 The outlook for household spending is uncertain. Many households are experiencing a squeeze on their finances. Others are benefiting from rising housing prices and higher interest income.<\/p>\n \u2013 Consumer spending has slowed \u201csubstantially\u201d due to cost-of-living pressures and higher interest rates.<\/p>\n Inflation is down. Rates are steady.<\/p>\n So far, so good.<\/p>\n But we may not be in calmer waters just yet.<\/p>\nMortgage holders rejoice \u2013 the Reserve Bank of Australia (RBA) kept the cash rate on hold in August for the second month in a row. So have we finally reached calmer waters? Or is there one last rate rise wave headed our way?\u00a0<\/strong><\/p>\n
Inflation pressures are easing<\/h3>\n
Why the rate pause?<\/h3>\n
The tide might be turning, but is one last rate rise wave coming?<\/h3>\n