Finance News

From the monthly archives: May 2022

We are pleased to present below all posts archived in 'May 2022'. If you still can't find what you are looking for, try using the search box.

NZ lifts rates by 0.5%, US expected to do the same - what about here?

Posted on Friday, May 27, 2022
The other night in the US, minutes from the May 3-4 meeting of the Federal Open Market Committee (FOMC) revealed members saw the need to raise rates faster than the market expected, in order to dampen inflation. The meeting resulted in a 50-basis-point rate hike, which was the biggest jump in 22 years. The FOMC said further such rate hikes would "likely be appropriate" at its upcoming June and July meetings. On Wednesday New Zealand’s central bank raised interest rates by 0.5% for a second straight meeting, and forecast more aggressive hikes to come, again to tame inflation. It’s the first time in more than 20 years that NZ has lifted rates by 1% over 2 months in a row. The NZ Reserve Bank’s Monetary Policy Committee lifted the Official Cash Rate from 1.5% to 2%, with the NZ Treasurer saying labour shortages and cost of living pressures were the reason for the rate hike. This leaves New Zealand at 2% and Australia sitting at 0.35%, but we're both f ... Read the rest of entry »

Albo vs Scomo: the real world impacts of pulling a political rabbit out of a hat

Posted on Wednesday, May 18, 2022
You now have just a few days to vote, and as expected both major parties have pulled a few rabbits out of their hats. But it’s quite staggering that even after all the restrictions and lockdowns, the pollies still haven’t worked out that we don’t like being told what to do.   In the COVID scenario, the iron fist was justified to a point in the interests of health and safety. But even with all the financial stimulus provided as compensation, many businesses went to the wall and others continue to do so.   Which is why this week has been a frustrating one for business owners, with Labor Leader Anthony Albanese publicly supporting a wage increase to match inflation. While Albo might be the hot favourite to win the election, telling a small business owner that their staff are all entitled to a 5.1% pay rise does not sit well with me, especially in the context of reduced hours and labour shortages in many industries. Of course, most business owners want to do the right thing by t ... Read the rest of entry »

The days of record-low interest rates are officially over

Posted on Friday, May 6, 2022
Unless you’ve been living under a rock this week, you will have heard that the RBA has lifted interest rates for the first time in a decade. Our official rate is now 0.35%.   Similarly, the US Fed lifted rates to 0.75%-1% and the Bank of England lifted their benchmark to 1%. Higher cash rates mean every person with debt is going to start paying more, since the ink hadn’t even dried on the RBA’s announcement before all the banks passed the increase on to customers.   Unsurprisingly, the increase didn’t flow on to cash accounts or term deposits, so not great news for those living off their savings.   And you can be pretty confident that the pain doesn’t end there. The war in Ukraine, COVID-19 lockdowns in China, and rising inflation are likely to push rates even higher – we could be looking at 3.5% to 4% variable by the end of the year.   For the average $700,000 mortgage holder, that translates to an interest-only increase of $145 per month, wh ... Read the rest of entry »

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