Paris
Well the US Fed is an Olympic gymnast when it comes to backflipping on rates.
Will they or wont they.
The Media and the talking heads say it is a done deal the Fed will raise rates.
I say the Media and a lot of the talking heads have been wrong on:
BREXIT
TRUMP
Italian Referendum.
Not just a little wrong but completely wrong.
Here is an interesting article about what the US rate rise may mean for Australian Mortgages.
Why US rates may affect Australian borrowers
The reason Australian mortgage holders may suffer is not as simple as assuming domestic interest rates will follow US rates. That’s unlikely, at least in the short term, as the Reserve Bank of Australia (RBA) actually may be forced to cut again if the Australian economy slips.
Higher US interest rates will put downward pressure on the Australian dollar, which will be welcomed by companies that benefit from the lower currency, but those with stretched valuations are at risk, according to the co-founder of Sydney-based fund manager Eley Griffiths Group, Ben Griffiths.
Financial stocks – banks more than insurers – and real estate institute trusts traditionally have been the most sensitive to rate movements and will struggle to meet market expectations, he says.
Analysts at investment bank Morgan Stanley warn that the big four Australian banks may start raising interest rates on all home loans, not just the investment loans that all banks have started lifting.
They say the higher rates on investment loans will not be enough to protect the banks’ profit margins, so shareholders will win out over customers and home loan rates will inch up regardless of what the RBA does with official interest rates.
In many cases, the amount of money the banks lend to owner-occupiers is double that lent to investors.
http://www.primecapital.com.au/us-interest-rise-may-hit-australian-home-loan-rates/
