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Category: Interest Rates

1-12 out of 15 results.

Markets relying on central bank sugar hits

Global central banks are delivering a sugar hit that markets are relying on, but it is unsustainable. Interest rates cannot continue to be cut into negative territory forever. 

Why the Reserve Bank will cut the cash rate twice

A close inspection of Reserve Bank Board minutes, the implications of US Fed moves, the way unemployment is measured and how monetary policy is set add up to a picture of further rate cuts.

Floating rate bonds rise in popularity

With US interest rates on the rise and the prospect of Australian rates heading the same way, floating rate bonds have increased in popularity as they allow investors to benefit from increasing rates.

Volatility and reflecting on the inflection

It took Wall Street and equity investors a long time to realise interest rates had gone through an inflection, and the era of the easiest money conditions in a lifetime is now over.

Risks to banks at end of construction boom

Australian banks are vulnerable to a collapse in the local housing market due to an overexposure to high-rise developments, interest-only loans and high loan-to-value ratios. The main uncertainty is the timing.

Is it time for an SMSF rethink on deposits?

Australian bank liquidity regulations are continuing to tighten, adversely affecting access to cash and the ability of SMSFs to earn the same returns from bank deposits as individuals.

Unconventional monetary policy is now conventional

In a recent speech, US Federal Reserve Chair, Janet Yellen signalled that 'unconventional' monetary policy actions by central banks are likely to be 'normal' for many years.

Banks take political heat to preserve margins and deposits

Following the recent cash rate cut, it seemed unusual for banks to then increase their term deposit rates, while only passing on a fraction of the cut to borrowers. What's behind this change in bank strategy?

How to read RBA interest rate decisions

The RBA follows a fairly standard formula when drafting its interest rate announcements each month and a keen observer might detect a change in view before an actual change in interest rates.

Global turmoil likely to make Fed patient

The US Fed has finally lifted interest rates as anticipated, but from here it's especially difficult to predict future rate changes given that current economic conditions would normally dictate lowering rates.

Chasing dividends often overlooks growth

The market has been supplying investors with high dividend-paying stocks, but unfortunately, this focus overlooks better opportunities with more growth and capital appreciation.

Australia’s pending refinancing revolution

Smaller financial institutions have become more competitive in the home loan market, and as they seek new funding sources, the market is doubting the value of the traditional prime bank BBSW benchmark.

Most viewed in recent weeks

Why we’re not buying the market yet

The Australian market bounced back last Friday (13th) and Monday (16th) tempting analysts to call the bottom of the coronavirus scare. This is too early as the impact on companies is not yet evident.

How $200 billion is magically created

Australia is in a relatively good position to borrow $200 billion, with the RBA using printed money to buy bonds in the market. The long-term consequences are better than the alternative.

Howard Marks on 'Which way now?'

Howard Marks is the largest investor in the world in distressed securities. What does he think after checking the virus positives and negatives, and how much has he changed his mind in only a few days?

Drawdown reductions needed for retirees - UPDATED POLICY

During the GFC, in the face of rapid falls in super balances, the minimum drawdowns required for pensions were reduced by 50% to help preserve overall retirement savings. It's time for a repeat.

What are the possible economic effects of COVID-19 on the world economy?

In a widely-quoted scenario using estimated attack and fatality rates of coronavirus, about 0.07% of the population of the US dies. That's about 230,000 people, which the market is not ready for.

Note to Australia: be more French in the COVID-19 war

Andrew Baker is well-known as a superannuation consultant. Now working in the UK, he was caught in France with his family and is in lockdown. He worries Australian policy was too slow.

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