RBA rate update

Well, that was unexpected…..

What is important here thought is what it means. We have had one of the longest periods of stable interest rates in Australian history.

No need to decrease rates, no case to increase. As the RBA cash rate is a tool to steer the economy (I’ll leave the discussion how effective that tool is for another post….) it means we are doing ok. The economy is not that strong (we would be bringing the cash rate up from it’s historic lows otherwise) but we are not going backwards. There is some job growth, there is decent retail sales, people are having their coffees, smashed avo’s and occasional night out.

A time like that it is good to strengthen your foothold in your market, fatten your equity/cash reserves and don’t go overboard on expenses. Prepare yourself for the possibility of a downturn and at the same time position yourself for a new growth cycle. Don’t be idle and relaxed. One or the other will come soon enough.

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