1 00:00:04,110 --> 00:00:06,510 Sean Aylmer: Welcome to the Fear and Greed Daily Interview. I'm Sean Aylmer. 2 00:00:06,990 --> 00:00:09,330 Sean Aylmer: It's been a very big week for the economy and 3 00:00:09,330 --> 00:00:11,820 Sean Aylmer: all those economists out there. First we had the board 4 00:00:11,820 --> 00:00:14,400 Sean Aylmer: of the Reserve Bank raise the official cash rate by 5 00:00:14,400 --> 00:00:18,660 Sean Aylmer: 25 basis points on Tuesday. Then yesterday, the National Accounts 6 00:00:18,660 --> 00:00:22,680 Sean Aylmer: Data showed the Australian economy grew by 0. 6% during 7 00:00:22,680 --> 00:00:26,070 Sean Aylmer: the September quarter. Gareth Aird is Commonwealth Bank's head of 8 00:00:26,070 --> 00:00:28,740 Sean Aylmer: Australian Economics. Gareth, welcome back to Fear and Greed. 9 00:00:29,070 --> 00:00:30,690 Gareth Aird: Good day, Sean. It's nice to chat with you again. 10 00:00:31,080 --> 00:00:34,019 Sean Aylmer: Okay, let's start with economic growth. The bureau statistics put 11 00:00:34,020 --> 00:00:37,380 Sean Aylmer: out the national accounts yesterday four times a year. Came 12 00:00:37,380 --> 00:00:40,410 Sean Aylmer: in at 0. 6 for the year through to September 5. 13 00:00:40,650 --> 00:00:44,729 Sean Aylmer: 9% because of the big bump we got last December. 14 00:00:44,729 --> 00:00:47,580 Sean Aylmer: That's the post- COVID bump. How did you take those 15 00:00:47,580 --> 00:00:50,580 Sean Aylmer: numbers? What were they like compared to your expectations? 16 00:00:50,909 --> 00:00:53,430 Gareth Aird: Look, there was a ... which actually reminded us of the pre- 17 00:00:53,430 --> 00:00:56,640 Gareth Aird: pandemic days, from a production side where we found out 18 00:00:56,640 --> 00:00:59,700 Gareth Aird: the growth increase by 0. 6% on the quarter and that 19 00:00:59,700 --> 00:01:02,250 Gareth Aird: was a normal number if you like, given we've been 20 00:01:02,430 --> 00:01:04,289 Gareth Aird: so used to for a couple of years of these 21 00:01:04,290 --> 00:01:07,199 Gareth Aird: kind of big swings in the quarterly change in production. 22 00:01:07,650 --> 00:01:09,720 Gareth Aird: The annual rate's a little bit misleading because we were 23 00:01:09,720 --> 00:01:13,110 Gareth Aird: in lockdown into the September quarter last year. But I 24 00:01:13,110 --> 00:01:15,899 Gareth Aird: think by and large the activity data, in other words 25 00:01:15,900 --> 00:01:18,209 Gareth Aird: the production side of the economy, came in pretty much 26 00:01:18,209 --> 00:01:20,880 Gareth Aird: in line with our expectation. We thought GDP would be 27 00:01:20,880 --> 00:01:23,640 Gareth Aird: up by 0. 7% on the quarter. So, it's a very 28 00:01:23,640 --> 00:01:26,250 Gareth Aird: small miss in the scheme of things. And the components 29 00:01:26,490 --> 00:01:29,130 Gareth Aird: of GDP were pretty much where we had them pegged. 30 00:01:29,520 --> 00:01:33,690 Gareth Aird: Decent increase in consumer spending, as you'd expect given households 31 00:01:33,690 --> 00:01:36,150 Gareth Aird: that have been sitting on a decent stock of savings 32 00:01:36,150 --> 00:01:37,800 Gareth Aird: and they've wanted to get out and about and do 33 00:01:37,800 --> 00:01:42,720 Gareth Aird: things since the economy reopened. Business investment and dwelling investment 34 00:01:42,720 --> 00:01:45,510 Gareth Aird: also up. And then you had some forwards in public 35 00:01:45,510 --> 00:01:48,480 Gareth Aird: demand and then net exports were a drug. But overall, 36 00:01:48,780 --> 00:01:51,360 Gareth Aird: the output side of things is behaved in a way 37 00:01:51,360 --> 00:01:55,020 Gareth Aird: that we had by and large anticipated. I thought there 38 00:01:55,020 --> 00:01:57,660 Gareth Aird: was more uncertainty around the print going into some of 39 00:01:57,660 --> 00:02:00,600 Gareth Aird: the lesser talked about components of the national accounts, like 40 00:02:00,600 --> 00:02:04,200 Gareth Aird: the income side and the implicit price deflators, and just 41 00:02:04,200 --> 00:02:05,910 Gareth Aird: to get a gauge of what's actually going on with 42 00:02:05,910 --> 00:02:08,880 Gareth Aird: wages and inflation. That was a little bit more interesting 43 00:02:08,880 --> 00:02:10,470 Gareth Aird: to me. And then of course, we also found out 44 00:02:10,470 --> 00:02:13,889 Gareth Aird: that the savings rate has now dropped back to close 45 00:02:13,889 --> 00:02:16,739 Gareth Aird: to where it was in the five year average pre- pandemic. 46 00:02:17,250 --> 00:02:20,310 Sean Aylmer: Okay. So, let's talk about wages and inflation as measured by 47 00:02:20,310 --> 00:02:23,100 Sean Aylmer: the national accounts. What's happening on wages first? 48 00:02:23,910 --> 00:02:26,310 Gareth Aird: Well, wages is moving higher and that should come as 49 00:02:26,310 --> 00:02:29,340 Gareth Aird: no surprise to people, given the wage price index picked 50 00:02:29,340 --> 00:02:33,300 Gareth Aird: up and the measures around wages in the national accounts pick 51 00:02:33,300 --> 00:02:36,060 Gareth Aird: up more than just pure wages inflation, you're picking up 52 00:02:36,389 --> 00:02:40,200 Gareth Aird: any compositional changes going on the economy, people getting bonus, 53 00:02:40,200 --> 00:02:42,300 Gareth Aird: basically just all the payments that are going into the 54 00:02:42,330 --> 00:02:45,180 Gareth Aird: household sector. And that's picked up quite a bit. It's 55 00:02:45,180 --> 00:02:48,750 Gareth Aird: what you'd expect, given how aggressive the RBA is tightening. 56 00:02:48,750 --> 00:02:49,740 Gareth Aird: I mean, I think there'd be a bit of a 57 00:02:49,740 --> 00:02:52,380 Gareth Aird: problem if we didn't see the wages side of things 58 00:02:52,380 --> 00:02:55,470 Gareth Aird: pick up, given what the RBA has delivered. But I 59 00:02:55,470 --> 00:02:57,870 Gareth Aird: think it's interesting when you overlay what's happening on the 60 00:02:57,870 --> 00:03:01,380 Gareth Aird: wages side with the prices side, and that's where you 61 00:03:01,380 --> 00:03:05,040 Gareth Aird: can get a measure of real household disposable income. And 62 00:03:05,040 --> 00:03:09,090 Gareth Aird: what we've found there is, it's actually declined. So, we've 63 00:03:09,090 --> 00:03:12,269 Gareth Aird: got this unusual dynamic, where the nominal side of income 64 00:03:12,270 --> 00:03:15,000 Gareth Aird: is actually going up and it's picked up quite a bit, but 65 00:03:15,000 --> 00:03:17,639 Gareth Aird: because prices of goods and services in the economy have 66 00:03:17,639 --> 00:03:20,880 Gareth Aird: lifted by more than that, real income, in other words 67 00:03:20,880 --> 00:03:24,630 Gareth Aird: that's the purchasing power of households, that's actually gone backwards 68 00:03:24,930 --> 00:03:27,690 Gareth Aird: and it's gone backwards for four consecutive quarters in a 69 00:03:27,690 --> 00:03:31,919 Gareth Aird: row. So, you can see in that context why consumers 70 00:03:31,919 --> 00:03:34,230 Gareth Aird: are concerned about the outlook and they don't feel right 71 00:03:34,230 --> 00:03:36,900 Gareth Aird: now like the economy's working for them, even though the 72 00:03:36,900 --> 00:03:40,950 Gareth Aird: unemployment rate is very low. And it's largely because their 73 00:03:40,950 --> 00:03:43,410 Gareth Aird: income's not able to buy as much as it did 74 00:03:43,410 --> 00:03:46,260 Gareth Aird: previously because inflation's picked up. And then of course, you 75 00:03:46,260 --> 00:03:48,780 Gareth Aird: overlay that with the fact the RBA's put a lot 76 00:03:48,780 --> 00:03:51,060 Gareth Aird: of hikes through that have yet to find their way 77 00:03:51,120 --> 00:03:53,040 Gareth Aird: in into the activity side of the economy. 78 00:03:53,970 --> 00:03:58,440 Sean Aylmer: So, we've had eight consecutive rate hikes, you just alluded 79 00:03:58,440 --> 00:04:01,890 Sean Aylmer: to it then. It hasn't really hit, well, certainly not 80 00:04:01,890 --> 00:04:04,440 Sean Aylmer: these national accounts anyway. It probably has to some extent, 81 00:04:04,710 --> 00:04:07,260 Sean Aylmer: but there's more pain to be seen in the national 82 00:04:07,260 --> 00:04:10,410 Sean Aylmer: accounts in this quarter and ongoing quarters. Is that fair 83 00:04:10,410 --> 00:04:10,800 Sean Aylmer: to say? 84 00:04:11,130 --> 00:04:14,940 Gareth Aird: Yeah, look, it is. In the September quarter, households on 85 00:04:14,940 --> 00:04:18,570 Gareth Aird: average had only been hit with 75 basis points of 86 00:04:18,570 --> 00:04:22,349 Gareth Aird: rate hikes, and that's basically because there's a lag between 87 00:04:22,350 --> 00:04:25,020 Gareth Aird: the RBA changes the cash rate, and then when bank 88 00:04:25,140 --> 00:04:28,260 Gareth Aird: adjust home borrowers on a floating rate mortgage, their repayments 89 00:04:28,260 --> 00:04:31,229 Gareth Aird: upwards. So, that three month lag means in the Q2 90 00:04:31,230 --> 00:04:33,930 Gareth Aird: national accounts, there was no impact of rate hikes. And 91 00:04:33,930 --> 00:04:36,839 Gareth Aird: in the Q3 national accounts, which you got yesterday, there's 92 00:04:36,839 --> 00:04:39,779 Gareth Aird: only a small impact. What we'll see from here is, 93 00:04:39,779 --> 00:04:42,960 Gareth Aird: and particularly as we go through 2023, that the rate 94 00:04:42,960 --> 00:04:46,110 Gareth Aird: hikes that the RBA have delivered really starts to have 95 00:04:46,110 --> 00:04:49,470 Gareth Aird: an impact on consumer spending. That's what they're designed to 96 00:04:49,470 --> 00:04:52,950 Gareth Aird: do but we might find out that actually, because the 97 00:04:52,950 --> 00:04:55,950 Gareth Aird: RBA has put so much through, things slow a little bit 98 00:04:55,950 --> 00:04:59,400 Gareth Aird: more quickly than they're currently anticipating. And that's pretty critical 99 00:04:59,400 --> 00:05:02,370 Gareth Aird: to our thinking that the RBA doesn't have too much further 100 00:05:02,370 --> 00:05:04,950 Gareth Aird: to go in their tightening cycle because there's going to 101 00:05:04,950 --> 00:05:06,989 Gareth Aird: be a huge impact from what they've already delivered to 102 00:05:06,990 --> 00:05:09,989 Gareth Aird: come through, not just because of that lag that I've 103 00:05:09,990 --> 00:05:11,940 Gareth Aird: mentioned about three months. But also, a lot of home 104 00:05:11,940 --> 00:05:14,729 Gareth Aird: borrowers have been on very, very low fixed rates and they'll 105 00:05:14,940 --> 00:05:17,100 Gareth Aird: be rolling off those rates as we go through next year. 106 00:05:17,670 --> 00:05:20,610 Sean Aylmer: Okay. Oh, we'll delve into that more in a moment, 107 00:05:20,610 --> 00:05:22,890 Sean Aylmer: but just before we leave economic growth, so does that 108 00:05:22,890 --> 00:05:26,400 Sean Aylmer: suggest the normal number of 0. 6% or the more normal 109 00:05:26,400 --> 00:05:28,950 Sean Aylmer: number, I mean what's going to happen this quarter, the next 110 00:05:28,950 --> 00:05:31,650 Sean Aylmer: couple of quarters? We probably won't see that sort of number? 111 00:05:32,520 --> 00:05:35,250 Gareth Aird: Yeah, we think it'll slow from here. In fact, probably 112 00:05:35,250 --> 00:05:37,380 Gareth Aird: the best way to think about the annual pace of 113 00:05:37,380 --> 00:05:39,330 Gareth Aird: growth at the moment, is to do what they do 114 00:05:39,330 --> 00:05:42,419 Gareth Aird: in the US, which is to annualize the quarterly number. 115 00:05:42,779 --> 00:05:44,490 Gareth Aird: And there you're looking at a growth rate of around 2. 116 00:05:44,490 --> 00:05:48,719 Gareth Aird: 5% in annual terms. So, what we're expecting from here 117 00:05:48,720 --> 00:05:53,039 Gareth Aird: is that the quarterly increase in production continues to come off 118 00:05:53,430 --> 00:05:55,560 Gareth Aird: and that the economy ultimately then as we go through 119 00:05:55,560 --> 00:05:58,770 Gareth Aird: next year, is growing at a below trend type pace. 120 00:05:59,100 --> 00:06:01,500 Gareth Aird: So, you can think of trend growth as something that 121 00:06:01,500 --> 00:06:04,619 Gareth Aird: you do in a steady state, and then when you're 122 00:06:04,620 --> 00:06:08,100 Gareth Aird: growing below trend, it's actually when the economy's slowing and 123 00:06:08,100 --> 00:06:11,520 Gareth Aird: with below trend growth, generally comes then an increase in 124 00:06:11,520 --> 00:06:13,770 Gareth Aird: the unemployment rate. And that's what we think is going 125 00:06:13,830 --> 00:06:16,380 Gareth Aird: happen as we go through next year. The economy will 126 00:06:16,380 --> 00:06:19,200 Gareth Aird: slow quite a bit because of these hikes. The unemployment 127 00:06:19,589 --> 00:06:22,320 Gareth Aird: rate will start edging higher and that in turn, will 128 00:06:22,320 --> 00:06:24,270 Gareth Aird: drop the rate of inflation in the economy. 129 00:06:24,990 --> 00:06:26,669 Sean Aylmer: Stay with me Gareth, we'll be back in a minute. 130 00:06:32,940 --> 00:06:35,729 Sean Aylmer: I'm speaking to Gareth Aird, head of Australian economics at 131 00:06:35,730 --> 00:06:38,729 Sean Aylmer: the Commonwealth Bank. So what will happen to rates on 132 00:06:38,730 --> 00:06:41,490 Sean Aylmer: Tuesday? The Reserve Bank governor, Philip Lowe, said there's no 133 00:06:41,490 --> 00:06:44,550 Sean Aylmer: preset plan. It will very much depend on data, but 134 00:06:44,550 --> 00:06:47,099 Sean Aylmer: the board also made it fairly clear that they're thinking 135 00:06:47,100 --> 00:06:48,180 Sean Aylmer: about more rate hikes. 136 00:06:49,080 --> 00:06:52,230 Gareth Aird: They're definitely thinking about more rate hikes, but we also 137 00:06:52,230 --> 00:06:55,470 Gareth Aird: know that they're thinking about pausing at some stage, but 138 00:06:55,470 --> 00:06:57,210 Gareth Aird: we just don't really know what it is that they 139 00:06:57,210 --> 00:07:00,839 Gareth Aird: want to see before they decide to pause. The 25 140 00:07:00,839 --> 00:07:04,050 Gareth Aird: basis point increase in the cash rate on Tuesday was 141 00:07:04,290 --> 00:07:07,469 Gareth Aird: very well anticipated. I think pretty much every analyst in 142 00:07:07,470 --> 00:07:10,650 Gareth Aird: the market was expecting rates to go up, but of 143 00:07:10,650 --> 00:07:13,830 Gareth Aird: course, there's no meeting now in January. And so, when 144 00:07:13,830 --> 00:07:16,080 Gareth Aird: we're thinking about next year, we know that the Reserve 145 00:07:16,080 --> 00:07:19,380 Gareth Aird: Bank is very cognizant of the lags, which monetary policy 146 00:07:19,500 --> 00:07:22,710 Gareth Aird: works. They've recognized that inflation's going to stay elevated for 147 00:07:22,710 --> 00:07:25,380 Gareth Aird: a while, but they also want to engineer a soft 148 00:07:25,380 --> 00:07:29,220 Gareth Aird: landing. They don't want to generate a recession to drop 149 00:07:29,220 --> 00:07:33,210 Gareth Aird: inflation and wages growth quickly. What they'd rather do is 150 00:07:33,210 --> 00:07:35,460 Gareth Aird: preserve the gains in employment that we've had by and 151 00:07:35,460 --> 00:07:40,080 Gareth Aird: large, not have the unemployment rate rise too much. They're 152 00:07:40,080 --> 00:07:41,670 Gareth Aird: okay for it to go up a little bit, but 153 00:07:41,670 --> 00:07:44,550 Gareth Aird: not too much, I think north of 4%. And I think 154 00:07:44,640 --> 00:07:48,270 Gareth Aird: if that's the outcomes that you want to generate, then 155 00:07:48,600 --> 00:07:50,670 Gareth Aird: the case to continue to raise rates as we go 156 00:07:50,670 --> 00:07:54,929 Gareth Aird: through next year gets softer because you're going to have 157 00:07:54,930 --> 00:07:57,360 Gareth Aird: a big impact from what you've already delivered. So, we're 158 00:07:57,360 --> 00:07:59,820 Gareth Aird: thinking at Commonwealth Bank that they've got one further rate 159 00:07:59,820 --> 00:08:02,190 Gareth Aird: hike to go in the cycle and then they're done 160 00:08:02,430 --> 00:08:04,650 Gareth Aird: and they basically just let the lagged impact of rate 161 00:08:04,650 --> 00:08:06,600 Gareth Aird: hikes do its thing as we go through next year, 162 00:08:07,200 --> 00:08:09,120 Gareth Aird: plenty of home borrowers are coming off record low fixed 163 00:08:09,120 --> 00:08:11,580 Gareth Aird: rates, which means you're getting natural tightening anyway as we 164 00:08:11,580 --> 00:08:14,760 Gareth Aird: go through next year. And in a lot of ways, 165 00:08:14,820 --> 00:08:17,790 Gareth Aird: the Reserve Bank can just let time do its thing 166 00:08:18,150 --> 00:08:20,611 Gareth Aird: and as the economy slows with it, inflation will come down. 167 00:08:20,611 --> 00:08:23,610 Sean Aylmer: Okay. So the Reserve Bank basically has two jobs, full 168 00:08:23,610 --> 00:08:28,920 Sean Aylmer: employment and price stability, the Fed Reserve, what's the story 169 00:08:28,920 --> 00:08:30,900 Sean Aylmer: there? Because certainly the Fed is saying we're just going 170 00:08:30,900 --> 00:08:33,450 Sean Aylmer: to lift rates until we get inflation back in control. 171 00:08:33,450 --> 00:08:36,660 Sean Aylmer: But as you've explained it there, the Reserve Bank has 172 00:08:36,660 --> 00:08:39,330 Sean Aylmer: an eye on employment and an eye on inflation? 173 00:08:39,840 --> 00:08:42,839 Gareth Aird: Yeah, well look, the key difference there is what's happening 174 00:08:42,840 --> 00:08:46,230 Gareth Aird: to wages. The Reserve Bank is of the view that 175 00:08:46,230 --> 00:08:48,270 Gareth Aird: as long as wages growth in annual terms has a 176 00:08:48,270 --> 00:08:51,569 Gareth Aird: three handle on it, then that is consistent with the 177 00:08:51,570 --> 00:08:55,589 Gareth Aird: inflation target, which is 2% to 3%. And therefore, there's 178 00:08:55,590 --> 00:08:58,260 Gareth Aird: no need to actually push the unemployment rate up to 179 00:08:58,260 --> 00:09:01,229 Gareth Aird: get wages down if wages haven't got at the levels 180 00:09:01,230 --> 00:09:04,229 Gareth Aird: that are inconsistent with the inflation target. And that's very 181 00:09:04,230 --> 00:09:06,150 Gareth Aird: much the same view that we share at Commonwealth Bank. 182 00:09:06,210 --> 00:09:08,340 Gareth Aird: When we look at our internal data, it's suggesting that 183 00:09:08,340 --> 00:09:11,400 Gareth Aird: wages growth is picking up probably to around 3. 5% by 184 00:09:12,540 --> 00:09:15,090 Gareth Aird: the end of this year, but that's certainly consistent with 185 00:09:15,090 --> 00:09:18,720 Gareth Aird: the inflation target. So, if you've got wages basically behaving 186 00:09:18,720 --> 00:09:21,840 Gareth Aird: in a way that means inflation's going to come down 187 00:09:21,840 --> 00:09:23,939 Gareth Aird: and you're not going to get into wage price spiral, 188 00:09:24,420 --> 00:09:26,820 Gareth Aird: there's no need then to continue to take the policy 189 00:09:26,820 --> 00:09:29,760 Gareth Aird: rate higher in a bid to get inflation down at 190 00:09:29,760 --> 00:09:32,490 Gareth Aird: all costs because you don't actually need to do that. 191 00:09:32,490 --> 00:09:34,800 Gareth Aird: Eventually that will just slow in line with it, the 192 00:09:34,800 --> 00:09:37,860 Gareth Aird: disparity between wages, growth and inflation. Whereas in the US, 193 00:09:38,250 --> 00:09:40,710 Gareth Aird: the Federal Reserve has effectively said wages growth is just 194 00:09:40,710 --> 00:09:43,230 Gareth Aird: too strong. We need the unemployment rate to go up 195 00:09:43,230 --> 00:09:44,910 Gareth Aird: because that's the only way we're actually going to get 196 00:09:44,910 --> 00:09:45,750 Gareth Aird: inflation down. 197 00:09:46,200 --> 00:09:48,300 Sean Aylmer: Gareth, I can't have the head of Australian economics at 198 00:09:48,300 --> 00:09:51,030 Sean Aylmer: the Commonwealth Bank talking to Fear and Greed and not 199 00:09:51,030 --> 00:09:51,990 Sean Aylmer: ask about house prices. 200 00:09:53,790 --> 00:09:55,800 Gareth Aird: Most people have got an interest one way or the other. 201 00:09:57,210 --> 00:09:58,530 Sean Aylmer: They do, they do. So, what do you think will happen over the next 12 202 00:09:58,530 --> 00:09:59,250 Sean Aylmer: months or so? 203 00:09:59,880 --> 00:10:02,730 Gareth Aird: Well, look what happens in the housing market from here 204 00:10:02,730 --> 00:10:05,069 Gareth Aird: is going to be very conditional on what the Reserve 205 00:10:05,070 --> 00:10:08,309 Gareth Aird: Bank ends up doing with rate hikes from here. There's 206 00:10:08,309 --> 00:10:10,829 Gareth Aird: a bit of a circularity when calling the Reserve Bank 207 00:10:10,890 --> 00:10:14,010 Gareth Aird: and the housing market, but obviously, we've got a profile 208 00:10:14,010 --> 00:10:17,280 Gareth Aird: for both. And on the basis the RBA just delivers 209 00:10:17,280 --> 00:10:20,250 Gareth Aird: one further rate hike, we think the peak to trough 210 00:10:20,340 --> 00:10:23,760 Gareth Aird: fall in home prices will be around 15% nationally. There'll 211 00:10:23,760 --> 00:10:26,250 Gareth Aird: be some variation across the major capital cities, but that's 212 00:10:26,250 --> 00:10:29,820 Gareth Aird: what we're expecting nationally. And of course, if they take 213 00:10:29,820 --> 00:10:33,569 Gareth Aird: the policy rate north of 3. 5%, we'd be looking for 214 00:10:33,809 --> 00:10:37,170 Gareth Aird: bigger falls in home prices. I think as far as 215 00:10:37,170 --> 00:10:39,780 Gareth Aird: behavior in the housing market goes and what the Reserve 216 00:10:39,780 --> 00:10:43,320 Gareth Aird: Bank is doing, I think most potential buyers out there 217 00:10:43,380 --> 00:10:45,660 Gareth Aird: who are not willing to transact in the market right 218 00:10:45,660 --> 00:10:49,170 Gareth Aird: now, are probably willing to sit tight until there's a 219 00:10:49,170 --> 00:10:52,079 Gareth Aird: bit more clarity around what interest rate, what the tightening 220 00:10:52,080 --> 00:10:54,569 Gareth Aird: cycle might look like. I think whenever the RBA has 221 00:10:54,570 --> 00:10:57,240 Gareth Aird: a hiking bias, even if they're on hold, but they're 222 00:10:57,240 --> 00:10:59,880 Gareth Aird: flagging the idea that rates could go higher, that will 223 00:10:59,880 --> 00:11:02,490 Gareth Aird: see a number of people sit on the sidelines. But 224 00:11:02,490 --> 00:11:04,620 Gareth Aird: I think the moment it becomes pretty clear that we've 225 00:11:04,620 --> 00:11:07,200 Gareth Aird: had the peak in the cash rate and then at 226 00:11:07,230 --> 00:11:09,120 Gareth Aird: some point down the line, we're actually talking about rates 227 00:11:09,120 --> 00:11:11,490 Gareth Aird: coming down. I think that's when you'll see activity in 228 00:11:11,490 --> 00:11:12,990 Gareth Aird: the housing market pick up again. 229 00:11:13,710 --> 00:11:15,600 Sean Aylmer: Gareth, thank you for talking to Fear and Greed. 230 00:11:16,020 --> 00:11:16,830 Gareth Aird: That's a pleasure, Sean. 231 00:11:17,429 --> 00:11:20,130 Sean Aylmer: That was Gareth Aird, head of Australian Economics at the 232 00:11:20,130 --> 00:11:23,220 Sean Aylmer: Commonwealth Bank. This is the Fear and Greed Daily Interview. 233 00:11:23,220 --> 00:11:26,160 Sean Aylmer: Remember, you should get professional advice before making any investment 234 00:11:26,160 --> 00:11:28,620 Sean Aylmer: decisions. Join us every morning for the full episode of 235 00:11:28,620 --> 00:11:32,040 Sean Aylmer: Fear and Greed, Australia's most popular business podcast. I'm Sean 236 00:11:32,040 --> 00:11:33,420 Sean Aylmer: Aylmer, enjoy your day.