Giving Australians “Brain Damage”: Mark Bouris aims at RBA

01st Mar, 2023 | In The News, Articles

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Mark Bouris calls out RBA for the havoc it has caused to the Australian economy.

Mark Bouris was fired up this morning when appearing on Sky News to discuss the potential for further rate increase, stating that the RBA is “just hoping” they’re getting it right and that the RBA doesn’t “really know what they’re doing.”

When asked by Sky News Australia First Edition host Peter Stefanovic why the RBA will not put borrowers  “out of their misery” with one significant rate increase instead of slowly dragging it out, Bouris fired back:

“Don’t get me started on Philip Lowe. As far as I’m concerned, the RBA is giving the nation brain damage! Brain damage!”

“One minute, the RBA is saying interest rates aren’t going to go up until 2024. Go buy houses and borrow money at fixed rates at 2% and you’ll be sweet. And the next minute,  they’re telling us ‘we’ve got to control inflation, we’ve got to control wages, we’re just going to keep putting rates up. 

“I don’t think he knows what he’s doing. That’s the bottom line. And I’m sorry, sure there’s a whole lot of science sitting around this and numbers and data, etc.” 

“At the end of the day, I don’t really think they know what they’re doing. They’re just crossing their fingers hoping they’re going to get it right.”

With the official cash rate at its highest level in over a decade (currently 3.35%), leading Westpac economist Bill Evans has predicted another two or three rate rises, before several interest rate cuts leading into 2025. 

Bouris described Bill Evans as “the guru” and “probably the most accurate predictor of rate increases and rate changes in the last 30 years in this country.”

When asked to examine Evans’ theory that borrowers need to brace for further rate hikes, Mark said

“We’ve had nine rate rises so far, and let’s say we have two more, that’s 11 rate rises. That means on 11 occasions in the last 12 months, we put interest rates up.”

“But when I did a calculation, we’ve actually had 13 rate rises at 0.25% so far, even though they’ve only done it on nine occasions, because we had quite a lot of 0.5% rate rises.”

“So, if we add two more into that we’re gonna have had 15 rate rises.”

“To put Bill’s thinking in context, in this country, historically, if we have six rate rises, we have six rate reductions after. That’s the general cycle. So if we’re going to have around 15 rate rises after the next two rate rises, then to bring us back to a normalisation, Bill’s thesis could be correct, we might expect to see seven rate reductions, sometime starting late 2024.”

Click the video above to see the complete interview with Mark Bouris. 

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