Australian interest rates are currently low and we all know that but there is little to no reason why bankers should be saying that economic principle have changed and that homeowners should be locking up rates or get into the market.
Mike Hirst is trying to scare people into the same train of thought by making economically unfounded statements that the Australian interest rates cannot keep falling.
If we look at Europe and the US for an example – we can see that negative deposit rates and quantitative easing are also functions, including LTRO’s, that can be exercised along the way by the RBA should the need arise.
Australia has significant troubles with the mining sector moving into a new and less profitable stage, unemployment being high, wages remaining high. Above all an improving USD is seeing money migrating back abroad and out of the bond markets and deposit markets.
There is plenty of room for the RBA to cut and seek other easing measures.
Mike Hirst is acting as conman who regrets not acting early enough to pass on rates and having missed the boat once again as the big four win market share by acting early. Trying to scare people into fixing home loans and attain credit is about as low as a banker should need to go. The speculation are simply unfounded.