RBA rate cut on Tuesday? It might ignite the property market again via ForexLive

In the comments this morning, from Bud, in response to McCrann's saying an RBA rate cut next Tuesday is “almost certain”

• Not credible!
  Giving the housing market in Australia. What do they plan? Putting more heat under real estate prices?

From the Australian Financial Review (Alan Mitchell) yesterday, agreement …

The RBA … should want to keep rates on hold, at least for now – and not just because the underlying measures of inflation are slightly above forecast. The more serious problem is that a rate cut now might spark another surge in real estate prices.

And …

• The key to the very low December inflation number is petrol, but the fall in global oil prices has a special feature that changes the usual monetary policy calculations
• It is a predominately a supply-side event
• Oil is not the only plus for growth
• The Australian dollar has fallen about 15 per cent against the US dollar and 10 per cent against the currencies of all our major trading partners since early September … a plus for investment and jobs
• It also will add to import prices and inflation
• Petrol prices and the dollar are doing part of the RBA's job for it … without inflaming the property market

From here (but its gated): RBA should avoid rate cut trap to prevent real estate risk

–

ps. I'm with Mitchell, not McCrann

posted via ForexLive