Reserve Bank of Australia Cuts Interest Rates to All Time Low
Key Points
As expected, the RBA finally pulled the trigger and cut the cash rate from 1.5% to 1.25%
This is the first rate move in either direction since 2016 and is a new historic low rate.
Governor of the RBA, Philip Lowe, indicated that the move would help reduce unemployment and boost inflation.
Lowe remains optimistic about the domestic Australian economy, but acknowledges foreign risks, notably from the US and China.
Further rate cuts as a result, won’t be ruled out and are still widely expected by economists down as far as 0.75%.
AUD/USD has rallied post release, choosing to focus more on USD related trade issues, rather than the Aussie itself.
The ASX200 also rallying, with a focus on offshore matters.
Best of probabilities to you,
Dane.
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Interesting, this will also probably help prop up the housing market. I'm a little out of date, but last I remember it was overheated and prices were in bubble territories in areas like Sydney.
It's not just a housing bubble, Australia is riding the biggest debt bubble in our history. The rate cut is an act of desperation from the banking cartel to try and keep their ponzi scheme afloat. The MSM is portraying this cut as a master stroke but they are going to need to keep doing it until they hit bottom and crash our currency. It's all smoke and mirrors.
The situation over there reminds me of the US 10 years ago. I'm wondering if I should just short all Aussie banking and insurance stocks? Or is it not gonna play out that way?
We've had economists over here (Adams, North) calling it an impending Armageddon and they've been trying to warn the policy makers in office for about two years but they won't change the way they manage the debt, quite the opposite actually they keep playing the same game that caused the problems to start with.
There are many parallels to the sub prime crisis a decade ago and in some ways it's even worse here now. We're already seeing an unprecedented rise in negative equity and because of the amount of investment properties and they way debt and exposure are assessed the figures have been obscured to conceal the problems.
I'd say the interest rate cuts will indeed keep things afloat for a while but when you see the AUD starting drop, the house of cards could be starting to tumble and could go into free fall. So shorting could be a good option if you can time it correctly.