Rates are staying at a record low 1.5%
- RBA leaves rates on hold
- Latest economic data mixed
- Rate cuts soon still likely
- Most housing markets remain robust
At its first meeting for the year, the Reserve Bank has decided to again leave official interest rates at the record low 1.5 per cent. Rates have now been on hold since August last year’s cut.
Although rates remain on hold, latest data continues to report a mixed performance by the national economy. The jobless rate has risen, planned construction and retail sales trends continue to weaken, and wages growth and inflation are at record low levels.
Full-time jobs are falling and the dollar continues to track at higher than desirable levels despite higher interest rates in the United States.
Housing markets have started the year positively with strong home auction clearance rates in Sydney and Melbourne. Most capitals reported solid house price growth at the end of 2016.
With the latest economic data still mixed, rate cuts remain likely soon unless the economy improves and regardless of continuing strength in the Sydney and Melbourne housing markets.
Dr Andrew Wilson is Domain Group’s chief economist
Twitter @DocAndrewWilson