the rba would argue rates need to be well north of here to deal with the enhancement to australia's terms of trade coming from resurgent iron ore and coal market in particular, thats why they are not interested in pausing here for a bit to wait and see, they simply do not care whether the marginal borrower can make his repayments, they are more interested in taking away the punch bowl before the party takes off, the reason for not pausing is because they are nowhere near where they believe they will begin to pause i.e. they say neutral is say 5%, they need to actually lean against the stimulus from rudd and terms of trade, so my guess is they have to go to 6% on the official rate, so no point to be placid and pause at 4.25% imo
