For 20 straight months the RBA have kept rates on hold, surprise surprise. Yet the banks have adjusted various rates (Interest Only, Principle and Interest etc) atleast half a dozen times over that same period. Wonder why? Here it is...
The RBA largely controls the short term money market, the 10yr Aussie bonds and LIBOR are the drivers for longer term interest rates, this is what our banks use to measure the future. Given bond yields are on the rise across the world, banks have and will continue to adjust their interest rates to suit.
The RBA can dream of low rates forever, however the banks will go broke if they have the same dream. No joke.
Rates are rising folks.
Your name is 4sight trader... how can’t you see this? (Pun intended)
