RBA Rates Decision – December 2009

The RBA chose to increase interest rates by another 0.25% to continue its program of moving rates up from their emergency levers.  This is the first time the cash rate has moved up in three consecutive months, since the RBA starting announcing cash rate movements back in 1990.

Brief Interest Rate Outlook for 1^st Quarter of 2010

So will interest rates continue to move at the speed they are moving now for the early part of 2010? Well that might all come down to how much we ‘splash out’ over the festive season.  If we open our wallets in a big way this Christmas then you can bank on further increases in the first quarter of next year of between 25 – 50 basis points.  If we keep a tight reign on spending, then you can bet the RBA will take a breather and hold off on any further increases until they see a broader improvement in the economy and not just a mining boom. If you are buying up this Christmas, don’t do it on credit as you might get a double whammy – increased interest rate on both your mortgage and credit cards!