Mark Bouris and Stephen Koukoulas discuss the chances of another interest rate hike in July with a full analysis of the local and global economic situation in this Monthly Update episode of Property Insights.
Stephen Koukoulas is an Australian economist and financial expert who joins us each month on Property Insights. With a career spanning 30 years across a variety of distinguished roles in the finance and government arenas, Koukoulas is known for his frank analysis and on-point commentary around topics such as monetary policy, inflation, housing market, and employment.
Join Mark and Stephen as they revisit Kouky’s Checklist – the list of factors that the RBA considers before adjusting rates. Will interest rates go above 4.1 this month?
Key Takeaways:
- The global economy is weakening. Major nations are already in recession and Australia’s economy is slowing down with our GDP now at 0.2.
- Australia’s productivity is “pretty dismal”. Mark and Stephen question the RBAs measurements of productivity and debate the relationship between wage growth, inflation and interest rate changes given the current economy.
- Inflation is still a concern, remaining persistently high. Though easing it’s likely not fast enough for the RBA. Mark and Stephen consider the reasoning behind the RBAs upcoming decisions.
- The housing market and stock market are relatively stable, however, consumer sentiment is low and commodity prices and retail sales are falling.
- The labour market is “surprisingly strong” and unemployment rates remain a significant factor for the RBA. Mark and Stephen discuss a likely push for unemployment rates to reach towards 4.0 or higher.
- Will there be a rate hike? Probably. While Stephen sees arguments for them to pause, Mark expects to see another hike given the RBA focus on unemployment. With ‘so many other moving parts in the economy’ everyone’s waiting on the June CPI to see how it will impact RBA decisions.
