Interest rates live updates: Fifth dose of pain set to crush millions of Aussies, lone voice tips RBA reprieve
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The lone voice tipping a rate hold
You probably haven’t heard of Phil O’Donoghue. But if you’re a mortgage holder, he might be your new hero by the end of this blog post.
First, some context.
Reuters surveyed 32 economists in the lead-up to today’s rate decision, asking them what they think the outcome will be.
Thirty-one tipped a hike.
The one exception? O’Donoghue.
Deutsche Bank’s chief Australian economist believes the RBA will shock the market by leaving rates on hold at 4.60 per cent, although he admitted the central bank has a “free hit” to hike again.
His argument is that the September inflation figures that came out last week and really pushed up expectations of a hike today were largely in line with economists’ – and, indeed, the RBA’s – forecasts.
RBA Deputy Governor Andrew Hauser effectively said as much shortly after the data was released.
“These numbers are broadly in line, my take is, with market expectations and, candidly, where we thought it would be as well,” he told a Senate hearing.
O’Donoghue says the September rate hike has given the RBA a few weeks of breathing room to wait for some more data before its final decision of the year on December 8.
“There will be fresh information about Q4 inflation, and there should be a clearer post-midterms outlook for global oil prices,” he said, per the Australian Financial Review.
“We are hopeful the board will come to its own conclusion rather than rely on the public ‘echo chamber’,” he added.
Could the RBA defy market expectations?
We’ll get into all the doom and gloom of today soon enough, but for now, let’s stick to the glimmers of hope.
While economists and traders widely expect a hike today, the RBA isn’t the only bank that has entered a meeting with an increase heavily expected recently.
Last week, the Reserve Bank of New Zealand held its own monetary policy roundtable but, rather than handing down higher interest rates as expected, it opted for a hold.
It wasn’t all good news – the RBNZ said it still expects to have to hike later in the year, and even warned about the risk of an abrupt global downturn.
But it does show that market expectations aren’t the be all and end all. Sometimes, surprises do happen.
What happens when
If you’ve followed along with our interest rates coverage before, you’ll know these days have a regular schedule.
The RBA will release its decision at 2.30pm (AEDT).
This month, it will also publish its quarterly Statement on Monetary Policy – effectively its snapshot of how the economy is tracking along, including some important forecasts about inflation, productivity, unemployment, GDP growth and so on – at the same time.
Governor Michele Bullock will hold her regular post-meeting press conference at 3.30pm.
The one difference today is when we can expect to hear from the treasurer.
Jim Chalmers usually stands up for a press conference on rates at about 3pm. Of course, today there’s a rather popular horse race that starts at that time, so we’re expecting Chalmers to speak around 10 minutes later than usual.
Speaking of the races, you can follow our Melbourne Cup live blog right here.
Welcome
Good morning and welcome to nine.com.au’s live coverage of the Reserve Bank of Australia’s (RBA) November interest rates decision.
The expected outcome of today’s meeting is hardly a secret; it’s been hard to miss the headlines full of economists, analysts and banks’ predictions that Governor Michele Bullock and her board will hike interest rates for the fifth time this year.
If those forecasts prove accurate, it would take the official cash rate target up to 4.85 per cent.
It hasn’t been that high since late 2008.
Join us as we bring you all the build-up to the decision at 2.30pm (AEDT), followed by reaction from around the country.
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