Interest Rates to continue to be steady.

Interest Rates
Australia’s biggest Reserve Bank Survey reveals no modification expected to the cash money rate on Tuesday, however borrowers can expect a rate rise next year followed by a downward cycle as quickly as 2017.
All 33 leading experts and economists in the finder.com.au Rerserve Bank Survey– including from the significant 4 banks– are betting the RBA will keep the cash money rate at 2.50 per cent on Melbourne Cup day (Tuesday, 4 November).
For the past 20 years, the Reserve Bank has moved the cash rate nine times on Melbourne Cup day, 6 of which were in the past ten years.
Some of the most common reasons for a hold on Tuesday were: the economy is not strong enough to require an increase, high unemployment, high Australian dollar, worldwide unpredictabilities particularly in the Middle East and Europe, inflation is on target and pressure on housing costs.
Most of the experts (91 per cent) are anticipating the cash rate to start rising next year, with two specialists forecasting rates to increase in 2016.
One of the 33 specialists– Andrew Wilson, Senior Economist at Domain Group– anticipates the next cash money rate move will certainly be a drop in the first quarter of 2015, pointing out “… bias now turning to downside … house prices now falling, inflation low, unemployment and dollar still too high, share market weaker and rising concerns over global economic outlook”.
Out of the 32 who anticipate the cash rate to rise, they predicted it’s most likely to be in August 2015– the average of these forecasts.
Michelle Hutchison, Money Expert at finder.com.au, said interest rates won’t increase for long and will drop again.
“Our economy is under pressure to perform better, and all 33 experts in the survey believe that the cash rate won’t rise for very long before it will start to fall again,” Ms Hutchinson said.
“The survey found that the cash rate is likely to peak at four per cent in 2017 according to the average forecast,” she said.
“There were varied expectations of when the peak could occur and how high the cash rate will rise, with majority (60 per cent or 18 respondents) expecting the cash rate to hit its peak in 2017, while eight respondents (27 per cent) are expecting the peak will be reached in 2016 and four (13 per cent) expect the peak to hit in 2018.”.
David de Ferranti, market analyst at Forex Capital Markets, is anticipating the highest peak, with the cash rate to hit 5.5 per cent.
One in three specialists are expecting the cash money rate to hit 4.5 to 5.0 per cent, a further 1 in 3 expect the peak to hit 4.0 to 4.25 per cent while the remaining 30 per cent are anticipating a peak of between 2.75 per cent and 3.75 per cent.
“It’s also clear that most experts believe the cash rate won’t hit the high levels we’ve seen in the past,” Ms Hutchinson stated.
“And regardless of when the peak will be reached, it’s likely to start falling soon after,” she stated.
Almost half of the respondents are anticipating the cash rate to begin falling once more in 2018, while three specialists are forecasting a drop as quickly as 2017.
Four are expecting to see it drop in 2019 and 10 expect it to reduce beyond 2019.

This valued information is thanks to the team at finder.com.au, one of Australia’s biggest comparison sites.