"RBA do not want to cut rates" Mark Bouris & Stephen Koukoulas | End-of-Year Update

[@stewatparkpark2933]

The underlying inflation rate at 3.5% is still 40% above the RBA target rate of 2.5% . 2.5 % x 1.4 = 3.5 % . Zero chance of an interest rate cut in the near future .

[@richardminhle]

Let’s not forget the official CPI is understating inflation by at least 3x. Only people living under a rock believe real-life inflation rate is 3.5%.

[@jdubb161]

Govt are spending like crazy. Hold most likely, maybe small hikes..

[@rongalaxie]

I am not surprised its the most popular economy update pod cast because it is approached by the two of you in such a sensible fashion, with good insights, keep it up, well done.

[@Leo555ZZZ]

Government spending , record high immigration , a failing energy policy and massive public service jobs growth is keeping prices high . Consequently inflation is staying high and the RBA cannot lower rates . They probably need to be even higher because of the Government's policies.

[@Boababa-fn3mr]

Yeah. Can't imagine any serious cuts to interest rates before the next downturn, which would probably start in the US.

[@matthewflinders1978]

It’s a joke at this point, we’re heading the same way Argentina went. I think it’s about time that people began to admit that big government socialism is failing (as it always does) and that the main driver of inflation in Australia is irresponsible government activity. Particularly in employment, the governments both state and federal are keeping unemployment down (as the primary source of new jobs in this wrecked socialist economy) and handing out colossal pay rises to public servants, you would have to be pretty stupid to discuss interest rates in Australia without highlighting these aspects of the problem as the main cause. Rather than speculating that Bullock is “taking liberties” or “gilding the lily” over interpretations between headline inflation etc. how about addressing the actual cause. Also, if we did cut rates, our currency will lose some value and because we import everything consumer(as our stupid politicians wanted more public servants than manufacturing employees for decades now) it would cost more in A$ and INCREASE pressure on inflation. As it is, these oversized state governments and the federal government are competing with the real economy(the non government economy) for labour, energy and resources, pushing up prices on everything, time to stop blaming Bullock and talk about the real problem. Mass immigration is another economy “heater” that has been used as a cover for the big government socialist economic disaster, now we have DEAD gdp growth and nagging inflation. Diddling the inflation figures is bad enough (like BOM temperature “homogenisation”) without people who claim to “know” making excuses for the fools that have run our economy down into this terrible debt and no growth position or blaming Bullock - who might actually be the only adult it the economic space. How about doing a job on the idiots in Canberra and the Premiers that caused the problems with this great platform you have built, or you can engage in hand wringing platitudes and hope the Ponzi scheme of and economy lasts a few years longer before it collapses in a heap of debt, poverty and civil unrest.

[@Rojosi]

Totally agree!

[@brayden2530]

Heading the same direction as Argentina is abit off 😂

[@domlipski5226]

Just in last 15 years this has happened: Consistent 3 digit inflation, federal prosecutor and pharma executives assassinated, several cases of wire tapping, Ex vice president sent to prison for 5 years for corruption, Minister of planning caught hiding millions of US dollars in bags, another public offical caught with millions in cash at the ex-president's house, same ex president escapes to Cuba to avoid prison, the ex-president after her caught on camera doing coke with his mistress, now add countless mass protests and a 50% poverty rate... I think we've got a little more to move before we hit Argentina levels.

[@matthewflinders1978]

@ OK, yes, not quite yet however there are very disturbing similarities.........no doubt about it.

[@dubbomarcus]

Geez…..that was well said. I feel I should copy and paste it.

[@scottwestall8738]

Mark, its very popular cause its turned into a comedy show with Stephen and his whiteboard predictions that are consistently incorrect. Its giving folks a great laugh !

[@ev132-e2h]

He probably has too many IP so he is kinda biased 😊

[@theeve550]

Name someone who is consistently right…

[@scottwestall8738]

@@theeve550 Compared to someone who is an "expert" getting it consistently wrong :) 50 Ticks tell me I'm not alone !

[@theeve550]

@@scottwestall8738 this example is specifically about interest rates, but remember when Philip Lowe said intrest rates won’t rise until 2024. He was at the time the person who decides if interest rates go up or down and still got it wrong. That example proves to me. Expert or not. No one can predict anything, its just opinions

[@Aussie_Anarchist84]

Aussie stockmarket at all time record high, real estate prices at all time record high, rents, debt levels at both consumer/household and government levels at all time record highs. If interest rates were 'high' - you'd see people fleeing stocks and going into cash/bonds to get yield. You'd see real estate prices, rents (our biggest expense) lower. Most importantly, you'd see reduced borrowing. People taking on less debt or paying down debt in favor of savings. We're not seeing any of that because INTEREST RATES ARE TOO LOW. Who cares about the doctored CPI that includes the government subsidies and all the other 'adjustments'. It's not measuring actual inflation.

[@Nick-mq9vz]

They are definitely not too low. They are unsustainable high. It will come down next year they will need to fins a new way to lower inflation the RBA has failed.

[@Aussie_Anarchist84]

@@Nick-mq9vz depends on your perspective. If you goal is to stop inflation, debt accumulation, restrain the real estate hyper bubble - then interest rates are too low. The RBA hasn't failed, they've done a brilliant job. Their job is to preserve the interests/profitability of the commercial banking cartel and artificially create at least 2% inflation per year. They've done exactly that. Real estate hyper bubble in full force, banks up 40% in the last 12 months while mining stocks are down 10% (as an industry, group). I agree though that rates will be coming down next year. They wont be finding ways to lower inflation though, other than pretending it doesn't exist by handing out endless government stimulus payments. When the QLD government (where I live) gives us $1,300 off our electricity bill, the ABS counts that as $1,300 less inflation but doesn't count the debt the QLD government accumulated to finance crap like this ;)

[@Nick-mq9vz]

@@Aussie_Anarchist84 It will help inflation yes but it won't solve the housing affordability/availability problem. If lower income earners can say now afford a house then they will also be stuck with high loan repayments. I think the only way to stop house prices getting out of control is more supply.

[@DanHall777]

Real estate is NOT. It is way down in the last 12 months

[@andrewgiovenco9892]

You’re right mate, I think rates are too low as well. Although it’s probably right at the point of not too low, and not too high, it’s going to be a slow, slow decline downwards. 2026 rate cut here we come 😅

[@daniera7635]

Brilliant Lads..as always. Thank you for getting me through '24..bum up chin down bring on '25.Good riddance 2024 financially.

[@Ab0minati0n]

Woudln't a rate cut just push house prices up even further? I dont think rates should ever been allowed to drop below 6% as it has caused soo many issues with high rents and housing costs we are currently facing

[@eTexperience]

Lower rates increases new developments which in return help put downward pressure on house prices. At the end of the day there’s a major under supply of homes.

[@Boababa-fn3mr]

​@@eTexperienceThat won't happen. Demand will rise, keeping upward pressure on prices.

[@eTexperience]

@ if you can significantly increase supply with rate drops plus deregulation ect, wouldn’t this in return reduce rental yield in the short term and long term reduce the demand for property as investors would look elsewhere?

[@Boababa-fn3mr]

@@eTexperience Lower prices, if they actually happened, and investor demand would be offset by more renters looking to buy and continued high immigration. There would still be limits to what the construction industry could deliver. And lower rates would tend to put upward pressure on inflation by fuelling demand. Lower house prices could still raise yields.

[@stewatparkpark2933]

1:16 - The government electricity subsidy did not " lower " the cost of electricity by even 1 cent . Once the subsidy ends the electricity price will be unchanged .

[@rossbaker9721]

They actually reduced it by 30% lower than it would have been.

[@crazyham]

Agreed & the RBA has chosen to ignore the influence of the government energy subsidies.

[@egs123able]

Go have a look at Govt spending fellas. Aus needs a DOGE!

[@rof8200]

When the government spends, it reduces productivity and increases inflation. So let's cut government spending

[@davincidribbler7427]

Why does it reduce productivity?

[@paulgale7190]

True, why does it reduce productivity?

[@antsmi33]

Rates are not high. The current rates are normal and where it needs to be.

[@jm_brisbane]

Agree. If the current rates are causing grief, the problem is not the interest rate, the problem is how much we had to borrow.

[@3800TURBO]

Rate cuts ain't coming for a loooong time. I work in logistics and can tell you people are spending at alarming rates. People have loads of cash. Our volumes are up higher than during the covid lock downs when everyone ordered online. I don't see a cut for 12 months. If ever as they're not high as they are.

[@kewpietonkatsu]

What segment of logistics?

[@domlipski5226]

I bet 78.55% of it is Temu.

[@kewpietonkatsu]

@@domlipski5226 hmm never bought... Have you??? Do you like it?

[@NatP-qt1df]

People may still be spending and consuming, but the value of those items are much lower than a couple years ago. Disposable income has reduced and people on a value number are spending less.

[@IHgg-m1p]

We just experienced an increase on relying on online ecommerce, so thie increase means a decrease instore shopping

[@gerardhayes5991]

Cheers Mark, enjoying the shows

[@mbstewart]

Love these podcasts! Cheers guys

[@yellowbrickroadtv]

Thanks for listening

[@vincentcacciola7161]

Sorry gentlemen when your importing half a million immigrants every year your just importing inflation things are not going to change

[@cameronmale83]

Insurance costs! Federal Government asleep at the wheel here. Running at 10-14%... ridiculous.... and they will approve IAG taking over RACQ.

[@ausairman]

Good point. Insurance is our of control.

[@chellybub]

Brilliant as always. Get those guests on 😎

[@yellowbrickroadtv]

That's the plan! Thanks

[@DancingWithFools-b1y]

Agreed gents....best aussie economy podcast around

[@whisper2441]

You don’t have to set up as a company when you get an ABN. The example given here was an uber driver has to set up as a company and get an ABN. Not quite right, you can be in business without a company structure.

[@spartanconscience2693]

The RBA should be raising rates as inflation is not 3% Any person paying bills knows inflation is way above 10%. The RBA is juts pampering to the cliques that have given generous amounts to politicians election campaigns like the real estate, banks and investors who have set up an a system that exploits people to become forever renters.

[@jonathanlaue3460]

The RBA can go to hell, as can the incompetent Albanese socialist party. The RBA is punishing the core of young Australians due to the governments reckless energy policies and spending. Absolutely STINKS!

[@mr_jdes]

Boomers always win.. go figure hmmmmm 😉👌🏻

[@TheBigBananaaa]

Not all people are disappointed with high interest rates 🤪 only 37% of people have mortgages who don’t like high interest rates 😲 30% are home owners without a mortgage > keep in mind that people with saving who supply most of the cash 💰 banks use also expect a good return on investment > if interest rates were zero percent 🤗 and all savings went into the stock market > do you think 🤔 the bank 🏦 will have enough money 💰 to lend everyone needing to service a mortgage 🧐

[@ev132-e2h]

young people are doing well with high interest rates as they accumulate savings and getting rewarded from stock market and relatively high interest rate. But unlucky if you have a mortgage, which a lot young people cannot afford to get into.

[@jpeterstme]

How does keeping rates high help to reduce cpi on insurance? Please cover this next time

[@ryanbruh752]

People have less money to buy things. Insurance is insurance on things. Things costing more = insurance to replace things = more.

[@jpeterstme]

What I mean is - we all agree that we cannot avoid these insurances and no matter how high the rba puts interest rate up the insurance companies will still increase the premiums each and every year. Other than we all refuse to renew our policies I don’t see how the cash rate can reduce the premiums and thereby reduce the inflation rate.

[@Boababa-fn3mr]

High rates kill demand, except for those on the receiving end of the higher interest

[@MichaelBarbalace-u2j]

I would like to know your thoughts on sarm rule being triggered and yield curve uninverting in United States historically these have never been wrong in predicting a recession. Why is this time different?

[@morfeen]

I make my students watch this show! Great for ATAR Economics!

[@JohnInvest17]

Economy good = House prices or Stock market goes up Economy bad = Rate cuts ---> House prices or Stock market goes up. 2025 will be fun.

[@MariaWest-bt4mv]

Love the Podcast, of yourself ,and yours good,ins and Outs keep it up,Mr Mb and Mr Steven.🦉🦉🦉😊

[@Nf00257]

So if trimmed inflation is all of a sudden the most important statistic then why do we bother talking about headline inflation at all.

[@user-makeozgreatagain]

I look forward to this discussion point each month. We have a bigger problem. If the RBA will not recognise government stimulus to ease pressure on Australians. What insurance,fuel,electricity suppliers will reduce prices by choice No person on earth chooses yo spend more on the “necessities”. The RBA are penalizing us on the costs of necessities. Very disappointing situation we are now in thanks to the government.

[@crazyham]

Chalmers won't critisize the RBA especially as he ageed that the RBA shouldn't be subject to governement oversight.

[@adamnoble7982]

Is the excise on cigarettes and alcohol accounted for in trimmed means as this is govt contributing to rising inflation?

[@aussieflyerdave5046]

We have to hold back spending while the gov is spending insane amounts of money on essentially consumable stuff (more gov workers and giving money away which finds its way to products and services pushing up inflation) meanwhile the average Aussie can’t make ends meet. May aswell send rates sky high and bring the whole system down as gov is just too big now

[@supalesz1708]

Agree, Mark and Stephen always have excellent discussions.

[@mr_jdes]

Did you know, Jodie Is a proud Coastie..., she’s a proud Coastie!

[@tweetybird2013]

The usual rebasing treatment of intercensal error distributes the error evenly over the five year period, as there is no further data to inform upon the distribution of the error within the period. Rather than distributing the impact of ADL back evenly over the 20 year period, the recasting process differentially adjusts each of the four intercensal periods, based on all information available for that period. This resulted in a greater impact on the data around the 2006 Census point, gradually decreasing to a minimal impact on the 1991-1996 data.

[@mariadelsimone1205]

Thankyou gentlemans,first time listener to your show. All about the inflation jargon,but so well explained by the Kouk and Mark. Well done. .

[@TanTran-kd1pw]

Can someone explain why RBA rate cut is always in headline at this moment? There is no certainty if RBA cut rate, banks will cut theirs. Even if they do, the savings from rate cut will not pass down to renters.

[@Boababa-fn3mr]

It's all about maintaining confidence in the market. Tell people cuts are just around the corner so things will soon get easier and they can spend with confidence. It's a fallacy but it works.

[@crazyham]

The inverse is also true. They claim that rates won't be reduced soon to prevent people from spending more in order to slow down consumption. This type of bluff can work both ways & currently they want people to reduce spending.

[@anthonyfoy515]

rates wont come down until unemployment rises.

[@matthewflinders1978]

Correct, the governments both state and federal continue to pump up employment with no regard for productivity.👍🏼

[@Tiago-qv9lr]

Correct

[@andrewgiovenco9892]

I think rates are too low as well. Although it’s probably right at the point of not too low, and not too high, it’s going to be a slow, slow decline downwards. 2026 rate cut here we come 😅

[@Freedomone153]

Our country did well under Trump in 2016 for 4 years.

[@Boababa-fn3mr]

It seems there will be no serious cuts anywhere until the next downturn. Note that the Fed is still at 4.5% and BoE is still at 4.75%.

[@Nick-mq9vz]

At the moment the 4 big banks do not have to compete with each other. They want to keep it this way for a long time. We have the option to shop around for interest rates in this country. At the moment this market is paralysed at high rates. Even if house prices get low enough for low income earners to enter the market the repayments will be unaffordable.

[@PeterEdwards-up6wz]

Feels like we need a rate rise. Cost of living here is crazy.

[@herbertvonsauerkrautunterh2513]

Rates starting to is great as I can factor that in for rent rises even though I bought all my properties before they went up 150% since 2019. Lol. Great passive income and I'm still on fixed interest under 3%>> hehe Government interference, control, over regulation and over taxation is the underlying problem. The RBA is an entity that's not even needed in reality.

[@JohnWoodley-s6u]

They need to increase GST to 15% and give the mortgage owners a break. This would be the most fairest way.

[@warwickwhatley9549]

Couldn't agree more. Unfortunately, we don't have a politician who has the guts to raise it. BTW, it should be widened to include all goods and services, including every item that are currently excluded. Could you imagine the uproar.

[@ChickityChicken]

No one forced to you to borrow so much mate.

[@aron.gortman]

@@ChickityChicken The words of a renter for life. Most people just want a home to live in and not be beholden to some property manager. Home owners are carrying the load. It's time to tax other sectors of the economy/society.

[@Jo-pg5gr]

So we all pay more. Why not tax the corporates instead who get away with paying nothing. Much fairer for the rest of us

[@ChickityChicken]

@@aron.gortman I bought my house for cash, no loan, in my 30s. Had to live in cockroach infested places and drive a holden barina for years. I had X100ks in the bank but drove a shtty hatchback, it was weird but worth it. Never had a loan in my life. 🙂

[@nigel3309]

All i'll say is this ... since 2022 my standard of living in Oz has continually declined with no end in site. The cost of living is crippling any chance of a decent existance for us now and for future retirement. A few years ago we would have consider ourselves as middle class but now we are poor lower class people who struggle to afford a decent cut of steak at the butchers, absolute farking joke !

[@crazyham]

All the fugures are fudged. Keep up the great work though guys.

[@duncan7855]

And lagging!

[@crazyham]

@duncan7855 Driving while looking only in the Rear View Mirror through binoculars 🤣

[@Miss.O.]

Hi Mark, firstly thanks for your podcast. Enjoy the watch. Just curious if these sticky items such as private schooling, insurances, housing etc… could be experiencing higher prices due to the fact that the cost of capital is higher due to elevated interest rates? Is it wrong for me to assume that the rate of price increases would soften if interest rates were lowered, reducing the cost of capital, therefore reducing the costs these companies incur?

[@MH-go1md]

The Government collecting a lot of tax from mining companies? Really?

[@stewatparkpark2933]

30% of profits plus royalties .

[@Leo555ZZZ]

The mining industry paid more tax than all the other sectors combined , for the last two years in a row. Don't fall for the anti mining activist's lies.

[@jamieb3502]

US mortgage rates went up when the Fed cut.

[@gremics-gallery]

I’m in Hervey Bay, QLD. One of the lowest socio economic areas in QLD. I go to the local shopping centre and people are spending plenty of money. No problem with households spending at all, regardless of inflation settings and interest rates. Subsequently, You need to change your angle for these conversations. It’s completely around capping housing prices now. Here is the RBA and GOV MANDATE: Changing housing from investment to a basic need and essential. Interest rates rise from here. Your focus is incorrect. Don’t take my word, I will let the 2025 first quarter reporting period speak for me! ⬆️ inflation and interest rates 🎉 Merry XMAS OH YEAH AND TRUMP IS BACK Happy New Year 🎉🎉

[@domlipski5226]

Trump would disagree with you.

[@jobyjob_memoriesof1985]

What should happen is RBA should first remove the concept of "interest only" mortgages at least for new loans. Banks should lend only as "interest and Principal" mode.. As an added step, they should increase interest rate for existing mortgages which are running as "interest only" It is time to rout out evil. Come on Australia....advance fair....

[@larkhill2119]

You need to report these scam investment advisers in the comments

[@crazyham]

You can also report them.

[@larkhill2119]

@@crazyham, I think KZbin needs to have so many strikes to delete.

[@halojones1843]

We are heading back towards a deflationary world over the medium term.

[@Boababa-fn3mr]

Demographics in the developed world are certainly deflationary. Looks like the elite are throwing everything they've got at it in an attempt to offset that.

[@rdapigleo]

What would a rent strike for all of 2025 across Australia do for home prices? Let’s find out!

[@offcut7167]

My 2 cents (for what its worth): I am expecting the trump tax cuts for US business/employees and tariffs on China & other nations to drive inflationary pressure. Countries cutting now are releasing too early. I hope Australia stay as is but it may be a hike if Trump gets his way on tariffs and tax cuts.

[@spartanconscience2693]

The cause for inflation are high house prices. Cost of living crisis is because people are spending. They continue to buy houses, cars, white goods etc. Restaurants and shops are full. Its people spending and not anything else.

[@Boababa-fn3mr]

Over 50s are spending. Younger folk are spending more on less stuff. Two or three speed spending landscape.

[@spartanconscience2693]

@@Boababa-fn3mr There is no cost of living crisis. Low wages and high prices generally has always been around. Its just a media driven scum campaign funded by the real estate sector, banks and investor groups using the poor as an excuse to lower interest rates so house prices can continue to climb. As yourself how is lowering rates helping the poor? How is borrowing money helping them?

[@leonie563]

Take a look at your Gross Rental Value (GRV) figure in your most recent Council Rates Notice. Get back to me in 2025 with what it says vs what you charge the rental property🎄

[@austinmackell9286]

Economic analysis has degenerated to 'The market wants the drugs. Give the market the drugs.'

[@Dilmahteabags]

What is the governments goal? Is it to make living so unaffordable here. Who are they favouring and what do they want to take from us.

[@jamieboehm3076]

Why dont they want inflation too low Is it because they loose money?

[@BlueMango100]

Mark you are the peoples Economist indeed 👍

[@big_time_1234]

They kept it too long for too long, now they're keeping it too high for too long.

[@geoffvalero3516]

keep rates as are..no more distortions to indebt staryans to their eyeballs so they can just buy a dog box..

[@peterkirgan2921]

Mark I wouldn't believe what Dr Jim or Michelle Bulldust tells you!!!

[@nuts2559]

the banks are not obliged to pay any attention at all to the rba. Banks are making billions. I own my house and plenty of bank shares. I vote for the corruption to continue.

[@BlueMango100]

The interviewer is great with real questions and concerns .... but this professor does not really provied any real solutions ... he does a balancing act ... and that's all 😮 Waste of valuable time .

[@scottwestall8738]

Take it for what it is. Its turned into a comedy show with Stephens consistently wrong predictions. Enjoy the laugh

[@Boababa-fn3mr]

He provides analysis, not solutions.

[@DjDmt]

US has a debt issue, they need to cut to get assets prices up so they can get the revenue from it, they can't afford a recession

[@Boababa-fn3mr]

Looks like they're slowly cutting, but still at about 4.5%

[@yeahnah773]

You guys don’t understand economics in my opinion. You constantly hope rates go down and weaken our currency. Cash should be a safe place to be. Interest rates need to go up. Asset prices should go down and those who are disciplined and save should be rewarded. And these fools on real estate tv shows should be made to feel how economically illiterate they are.

[@aron.gortman]

"Asset prices should go down and those who are disciplined and save should be rewarded." This will never happen in this country with the politicians we have...you can just say your goal is to be a renter for life.

[@yeahnah773]

@ my goal is to point out the flaws in a system that has no decent long term prospects. And to give the good a shot If we actually stood together and decided enough is enough we could have it changed tomorrow But people of this country know about drake vs Kendrick And nothing of the reason they go to work every day For money That is a renter’s mentality

[@aron.gortman]

@@yeahnah773 Step 1 is to halt the mass migration and you'd instantly have affordable homes. Tax corporations. End centrelink bludgeoning.

[@Boababa-fn3mr]

Inflation is built into the current system, which is a black mark against cash for returns. Moreover, this system is global. We can't readily isolate ourselves from it. That said, we could manage our position within that system far better than we are.

[@yeahnah773]

@ 506% asset inflation over 30 years is built into? Nahhhhh