I missed the RBA’s announced interest rate hike today as busy with other things – including another pleasant afternoon tea with W. Max Corden where we discussed immigration. The RBA interest rate increase was widely tipped though, on balance, it must have been a close decision. Consumer spending is not that strong at present and the investment boom that is occurring seems healthy.
The statement by RBA boss Macfarlane is worth studying. The cash rate is increased by 25 points, to 5.75% because the world economy is driving Australia hard and because a boom in the share market and a return to relaxed borrowing attitudes are a bit dangerous. Inflation is around 3% and inflationary risks had increased sufficiently.
The stockmarket barely wobbled today so I assume the downtown smarties were more confident about a rate increase than I was.
This was the main economic news today for me. But, of course, I am not only interested in economics – if you have views on the interest rate hike or anything else please consider this an open invitation to express your views. I’ll be a bit quiet over the next few days as I deal with long-postponed administrative duties. So help me out.