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Speaker 1: Welcome to Ask Fear and Greed, where we take your

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Speaker 1: questions and do our best to answer them. I'm Michael

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Speaker 1: Thompson and good afternoon, Sean aylmer Lli Michael, Sean. Today's

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Speaker 1: question comes from Daniel and he went to our website

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Speaker 1: Fear and Greed dot com dot au and sent it

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Speaker 1: in through there. And you can do it through the website,

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Speaker 1: or you can go to Facebook or LinkedIn or Instagram

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Speaker 1: and send us a message on any of those and

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Speaker 1: we'll pop your question on the list. But Daniel went

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Speaker 1: to the website and he said, Sean, you've said that

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Speaker 1: Australia is about six months behind the US on interest rates.

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Speaker 1: With so many other countries including the US now having

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Speaker 1: cut rates, shouldn't the RBA actually be thinking about the

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Speaker 1: same thing.

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Speaker 2: Hmm, well, you'd think so. And I'd hate to say

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Speaker 2: that what I have said previously about the six months

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Speaker 2: is wrong or anything, but say you're right. So more

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Speaker 2: than half developed countries have now cut interest rates, Daniel,

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Speaker 2: including the US and New Zealand and Canada and the UK,

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Speaker 2: and Australia has been six months behind. So the logic

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Speaker 2: is that surely we will move in the next few months.

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Speaker 2: The difference, it seems in Australia is our economy is

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Speaker 2: just holding up a bit better than everywhere else. Now,

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Speaker 2: partly that's because interest rates in Australia didn't quite go

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Speaker 2: up as far as some of those other countries. Therefore

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Speaker 2: has have sort of less to fall. So I think

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Speaker 2: a big reason for it. From Daniel, I'm saying from Daniel,

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Speaker 2: I'm looking at you, Michael, But Daniel, I'm talking to you.

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Speaker 2: I'm just looking at Michael. Daniel. Look, our race didn't

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Speaker 2: go up as much, so our rates probably don't have

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Speaker 2: to fall as much, so they probably don't have to

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Speaker 2: fall quite as fast. But a bit more to that, Michael,

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Speaker 2: I think, are you going to tell me that or

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Speaker 2: are you just going to tease me with that?

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Speaker 1: Why then, is our economy more resilient than others? I

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Speaker 1: know that it was part of the interest rates not

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Speaker 1: going as high. Is it the fact that our employment

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Speaker 1: market has remained so strong because we've been able to

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Speaker 1: keep exporting so much?

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Speaker 2: What is it? So, there's a few things. It is

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Speaker 2: employment market and migration. We've had huge amounts of people

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Speaker 2: coming in that's really given some oomph to the market.

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Speaker 2: The other thing that Australia we all have these variable

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Speaker 2: rate home lines, whereas many other countries they tend the

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Speaker 2: UK and US particularly to have fixed right homelans. So

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Speaker 2: if you change and interest rate here, the transmission effect

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Speaker 2: is pretty quick gets it hits homeowners really quickly, whereas

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Speaker 2: in the UK US they may have to move more

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Speaker 2: one way or another to actually have the same impact

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Speaker 2: because all these people have fixed rate loans. So there's

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Speaker 2: a couple of things in Australia, migration and the fact

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Speaker 2: that we all have these variable rate loans, which has

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Speaker 2: made shifts in interest rates different to overseas. Having said

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Speaker 2: all that, we are still about six months behind now,

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Speaker 2: I wouldn't be surprised if we don't get a rate

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Speaker 2: cut until kind of the middle of next year. And

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Speaker 2: we spoke about this a couple of months ago. The

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Speaker 2: consensus you is definitely February. They think by February they'll

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Speaker 2: have to move. But those employment figures we saw in

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Speaker 2: the last couple of weeks got that labor markets strong,

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Speaker 2: so I just wouldn't put my money on that either.

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Speaker 1: So it could be more than six months, okay, And

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Speaker 1: so Michelle Bullock, the Reserve Bank Governor, has been quite adamant,

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Speaker 1: hasn't she when she's been asked this question kind of

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Speaker 1: why are we not following the US? Why are we're

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Speaker 1: not following others in doing this? And she's been quite

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Speaker 1: clear that that Australia will run its own race right

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Speaker 1: because there's so much other data to assess it on,

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Speaker 1: not what other countries are doing.

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Speaker 2: And what she has said is that we will cut

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Speaker 2: rates when we think that inflation will get to that

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Speaker 2: two to three percent target band in a sustainable manner.

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Speaker 2: It's at three point nine percent now, it's not anywhere

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Speaker 2: near two to three percent and certainly not in a

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Speaker 2: sustainable manner. So we've still got a while.

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Speaker 1: I feel like Michelle Bullock is like the nation's parent,

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Speaker 1: where she's like, if if little Timmy told you to

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Speaker 1: jump off a cliff, would you do that too? You

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Speaker 1: know that kind of Yeah, No, I'm sorry. It's well,

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Speaker 1: just because the US is going to cut rates doesn't

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Speaker 1: mean we have to as well. It feels as though

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Speaker 1: it almost at that point in the posts RBA board

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Speaker 1: meeting references, it's just like this question again.

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Speaker 2: Has she got kids? Michelle Block, She does, She's got

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Speaker 2: a couple of kids, hasn't she I don't know. Does

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Speaker 2: she take the same sort of tone at home as

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Speaker 2: she does the Reserve Bank meetings?

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Speaker 1: You would you would imagine that that dealing with a

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Speaker 1: bunch of journalists in the in the press conference after

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Speaker 1: the RBA board meeting would be like dealing with a

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Speaker 1: bunch of children at times, because everyone is asking the

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Speaker 1: same question, in many.

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Speaker 2: Cases different way. Isn't it just very very.

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Speaker 1: Very slightly changing the wording?

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Speaker 2: Can I have a doughnut? No you can't? Okay? Can

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Speaker 2: I have one of those round things with icing on it? No?

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Speaker 1: No?

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Speaker 2: Can't you know what you brought home today? Can I

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Speaker 2: have one of those? No? You can't.

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Speaker 1: Yeah, exactly, indeed, it's exactly the same. Anyway, we've gone

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Speaker 1: off on a slight kind of tangent. But coming back

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Speaker 1: to Daniel's question, we have answered it. Do you agree, Sean?

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Speaker 2: Yes?

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Speaker 1: Done, we are finished. We are all well and truly done.

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Speaker 1: Thank you Daniel for the question, and thank you Sean

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Speaker 1: for answering it so well.

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Speaker 2: Thank you Michael, Thank you Daniel.

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Speaker 1: Remember, if you've got something that you would like to know,

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Speaker 1: then please send through your question on LinkedIn, Instagram, Facebook,

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Speaker 1: or do what Daniel did, and head along to Fear

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Speaker 1: and Greed dot com dot are you. I'm Michael Thompson

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Speaker 1: and this is ask Fear and Greed