Warren Hogan
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Yeah, no, I think a wise strategy from here would be to sit back for a while.
My calculation is that the total interest payments and mortgage holders in Australia can almost have doubled in this period.
And because we have so many variable rate mortgages in Australia, we're going to see a pretty immediate impact.
When I say that, I don't mean within days and weeks, but within weeks and months, we're going to see the results of what this first wave of rate hikes is doing, particularly to the housing market.
So I think it's worth just sitting back for a month or two.
I don't think this is the end of the tightening cycle by any stretch.
I think they've got a pretty clear idea that they want to get the cash rate up to 2.5% to 3%.
But I just don't think they should rush it all through in the next few months.
They should just ease back a little bit.
But there's also a case, a strategy, a tactic to get it done early and then sit back and get the pain out of the way.
I'm just a little bit more cautious, I suppose, at the moment.
Well, I think we're already starting to see the effects of the war in the Ukraine unravel in terms of inflation in the sense that the two key commodities that were impacted, energy and wheat, are coming off.
Maybe not the problems that Europe faces in terms of supply and price, but the price of oil is now down under 100.
Price of petrol here in Australia is coming off a bit, which is great.
And the price of wheat is well down.
And other commodities, timber is down a lot.
So we're starting to see, whether it's the war-related issues or the general supply chain problems of the pandemic period,
But the real, I think that what we've learned in the last month or so is the real international story is that we're starting to see the big economies of the world slow down, particularly the United States.
And if that slowdown starts to really gather some steam in the next few months, it suggests that the RBA might not have to do as much as they first thought, or they could be a bit more measured.