Saturday, July 16, 2011

Interest Rates To Plunge?

The big story today is Westpac's announcement that they predict that Australian interest rates will drop rather than rise over the next year, by up to 1%. See The Australian for a good summary of this story (just be careful that they don't try to hack into your voicemail).

My gut feeling is that Westpac is right. The US economy is not doing well and politicians their a playing games regarding government loans, consumer confidence is low, and Greece is bankrupt and that issue still has a long way to run.

The economy in Australia is very bumpy, like a crocodile's back.

So interest rates could fall in the short term. If so, the question is: will property prices increase as a result?

No comments: