Central Banks have very limited tools to bring inflation under control other than hiking interest rates to suppress consumer demand....The current main drivers of inflation seem to be fuel, rental pricing, electricity and house prices.....
One could argue that the writing is on the wall and to truly make a dent in demand for these items and services the RBA will continue to increase interest rates until we are in a recession. My opinion is that Central banks will do this as the bubble needs to be popped/deflated in order to create future opportunities in the inflationary part of the cycle. Navigating the political sh!tstorm that will come from this is now up to the new governor of teh RBA.
So what happens to BNPL companies in this environment?...If they can survive the interest rate increases then there is opportunity to expand their base as more and more consumers turn to BNPL to cover short term bill shocks during this deflationary point in the cycle..The trap is managing bad debts & defaults that typically arise during this time.
Maybe I'm mad
ZIP Price at posting:
28.8¢ Sentiment: Hold Disclosure: Held
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