Interest Rates, Vlog

Will August 2023 See a Rate Rise?

by Greg Hearn

The Financial Physicist Video Log

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Hi Greg Hearn the Financial Physicist I’m out here in this beautiful Australian bush having I’m actually at Narooma which is about an hour hour and a half from our place uh and just been for our mountain bike ride on a Monday having a very rare day off but I thought I’d just do this little video to talk about changes that we’re seeing and what’s happening and what’s expected uh coming forward so yeah it’s a beautiful day it’s like 17 degrees 17 degrees not a breath of wind so it’s just been a magic magic day for a ride so I picked the right day to have a day off I think um of course we now have a new well coming new Reserve Bank Governor and changes to the Reserve Bank how they’re going to work and who’s going to do the reporting so it will be a lot more back onto the board rather than into the um into the Governor which is how we’ve had it previously I don’t know if that’s going to make much difference um the other thing is we’re going to have less meetings so we won’t have 12 or 8 Rises monthly in a row um but what we’ll see is actually bigger rate rises which is what I said many many weeks ago um it’s not going to be changing they’re just going to move in bigger lumps but we first have to get to August so what’s going to happen in August my tip is we’ll go up again um unemployment is still really low and that’s fundamentally putting pressure on rates because you’ve got full employment so you’ve got a lot of money in the economy we still have a lot of people overseas I don’t know if you’re still watching your your Facebook and that but we we’ve got a heck of a lot of people overseas um on holidays and and so good on but that’s that’s going to put pressure on pressure on rates um uh the other thing is the market now I’m going to be sceptical here but let’s just say the market is pushing fixed rates up so we’ve seen uh one two and three year rates go up uh in the last week again so they’ve just continually going up 0.3, 0.2, 0.1 yeah they just it does vary uh and that’s yeah that’s interesting that they’re they’re still going up now my sceptical side says the banks are gaming the market that is they are setting their own rates um and not necessarily observing what the the bond market is doing but fundamentally they can’t do it that much uh because they’re trying to lock people into fixed rates and they’re just not economic you’re seeing fixed rates at 6% um and so yeah so it’s just not economic anyway um we will see in time but the bottom line is my tip is next August unfortunately we’ll have another 0.25 rate rise and I don’t think we’ll see that could all be the last um there might be another one in October or something like that I just don’t think we’ll see one in September um the new Governor is going to wait for things to pan out a little longer than what Dr Phil does um from my reading of the of the commentary about her um so we will see uh in time so watch this space all right thank you peace out.

Greg Hearn

Greg Hearn

Principal Greg Hearn, an award-winning professional with over 30 years of experience working for and with many of Australia’s largest banks and finance lenders providing residential, commercial as well as plant & equipment finance.

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