What will the Reserve Bank do with Interest Rates Tomorrow?
The Reserve Bank meets tomorrow to decide what to do with interest rates. The majority of economists are predicting no change. Many are predicting rates will be decreased once more this year. The general consensus seems to be that rates will begin to increase next year at some stage.
Many parts of the economy are still sluggish, housing construction excluded, and unemployment is still too high. The events in Greece are also leading to uncertainty which may cause the Reserve Bank to hold steady.
The government has been successful in making lenders tighten up on investment lending which will slow the market down and negate the need for Reserve Bank action.
So, with rates not looking like increasing any time soon and the likelihood of another rate cut later this year, should you fix?
Fixed rates are still quite low but not as low as some of the variable rates that are available. If you like the idea of the security and are worried about your ability to make the repayments in rates increase then a fixed rate may be for you. Just make sure you talk to your Finance Broker to make sure you are aware of the restrictions of a fixed rate.
We will know what the Reserve Bank does at 2.30 tomorrow. Interesting times ahead!