Thanks wayne :o)
They still have a pissily small official interest rate. Why do the Americans make such a big deal of everything?
kay henry
good point kay – i think the main reason is one word ‘sentiment’. people think that this signals the start of a trend! everyone wants to pick the start of trend.
Rogue,
Imagine if we had such low rates here- you could buy up everything in sight. Investor’s paradise with those kind of rates. I know that America’s RE market is somewhat overheated… but surely it isn’t gonna be a mad panic for them because now they have to pay a bit of interest. To quote an infamous former forum member… “boohoo- wanna tissue?” hehe.
kay henry
yep i know what you mean. the only thing is that the property market is only part of the equation. interest rates reflect in some ways the state of the entire economy and with it the direction the governement want to steer the economy in the future. interest rate direction/levels make commodity traders, sharemarkets, fund managers, policy makers etc very very nervous….thats why greenspan is the most listened too man in the world…..
Rates rise and the Stock market moves up ?????
Put down as a sign of confidence in future growth.
rate rise – stock market up??? not necessarily. depends on the make up of the economy. some will win and some will lose..
for example the aussie stock exchange is hugely dependant on the banks. interest rate hike generally are not so great for the banks due to a likely softening in the property market so therefore our overall share indexes might be negatively effected. also interest rates will effect the exchange rates so for example overnight the usa exports have become a little less attarctive due to a probably strengthening of the us dollar.
will have to find some of the old textbooks.
anyway the important thing is not so much the interest rate hike but the price of oil. now thats interesting!!!!
45 bucks a barrel. some saying cld go to 70.00.
a guy on the tellie last night reckons we will soon all be paying 3 bucks per litre at the bowser. thats 150 bucks to fill a normal tank. thats 250 bucks for a melb-lorne-melb round trip. will make w/enders an expensive persuit.
but will also prob push the price of a airline ticket to noosa to a few thousand dollars…south melbourne beach is starting to look like an attractive holiday destination!!!
“They still have a pissily small official interest rate. Why do the Americans make such a big deal of everything?”
As someone who actually understands the adverse effects of rate hikes has highlighted, raising the “pissly small official interest rate” has far wider economic ramifications than Americans paying “a bit more interest”.
In fact, if you took the time to understand the US economy, you will have noticed mortgage rates have declined on the back of weaker job data.
The main purpose of the rate hike is to stem inflation. But as [aussierogue] touched on, the impact this “pissly” hike has on [the world’s] stock markets, currencies, trade – imports v. exports, oil prices, needless to say the millions of people and companies effected by the US economy, extends well beyond American’s paying a bit more interest.
“Imagine if we had such low rates here – you could buy up everything in sight. Investor’s paradise with those kind of rates.”
Need I say more.
— Michael
>> “They still have a pissily small official interest rate. Why do the Americans make such a big deal of everything?”<<
Bear in mind that this is not the rate the consumer pays:
U.S. weekly mortgage index off 0.7% By Rex Nutting
WASHINGTON (CBS.MW) — Applications for mortgages in the U.S. declined slightly last week, the Mortgage Bankers Association said Wednesday. The weekly application index fell 0.7 percent on a seasonally adjusted basis. It’s down 24.2 percent from a year ago. The index for purchase loans fell 2.7 percent while the refinance index rose 2.5 percent. The rate for a median 30-year fixed rate mortgage fell to 5.80 percent from 5.97 percent a week earlier.michael – i think kay was just trying to make sense of it all. it is a property investing forum btw and not everyone has studied economics.
” michael – i think kay was just trying to make sense of it all. it is a property investing forum btw and not everyone has studied economics.”
My response was not an economics lesson, the tone reflects my dislike for backhanded generalization directed at Americans.
— Michael [Washington DC]
michael – fair enuf…
Originally posted by aussierogue:rate rise – stock market up??? not necessarily.
Sorry but was quoting on what happened the day the rate increase was released, was not guessing the future.
gmh – no worries. i probably misread as you put question marks at the end of the statement..
Originally posted by aussierogue:anyway the important thing is not so much the interest rate hike but the price of oil. now thats interesting!!!!
45 bucks a barrel. some saying cld go to 70.00.
Agreed, and it should not be blamed on Iraq, it is more the demand of the worlds two driving economies.
It must have an effect on inflation.
Of course if the Americans actually stopped driving trucks, instead of cars … but thats a debate for a different forum
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