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Speaker 1: This is jam nasion were Jones?

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Speaker 2: Well, yesterday the Reserve Bank raised interest rates for the

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Speaker 2: fourth time in four months, and home loan borrowers are

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Speaker 2: bracing for more repayment pain. People are feeling quite nervous.

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Speaker 2: We are very nervous. We have our money. Gurufi Zajas

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Speaker 2: on the line to break it down for us.

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Speaker 1: Hello, Effie, good morning Amanda and Jenvie or.

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Speaker 3: Not ze Jajas.

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Speaker 2: Answer to that, I'm sure, So what's happening here? We

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Speaker 2: were told there might be more? But are people shocked

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Speaker 2: that there's more?

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Speaker 1: Look, I don't think we were shocked. You know, we're

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Speaker 1: going to use to these rate hikes, as you said,

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Speaker 1: the fourth one in a row. Had the inflation numbers

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Speaker 1: been higher than it could have been actually higher yesterday,

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Speaker 1: so the point five was expected. You saw them in

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Speaker 1: the papers, the economists was saying. But still the pain

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Speaker 1: is very real because these four rate hikes. If you've

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Speaker 1: got a half a million dollar morning, you now have

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Speaker 1: to find five hundred dollars extra per month. And we

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Speaker 1: know people in different states and territories have different amounts.

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Speaker 1: In Sydney, a million dollar mortgage is not a big

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Speaker 1: deal for some people and that's an extra thousand dollars

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Speaker 1: that you'll go to find to meet your loan repayment.

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Speaker 3: And if you're say you're paying way above your minimum payment,

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Speaker 3: does that still affect you.

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Speaker 1: That's a good point, Jonesie, because I'm not one to

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Speaker 1: kind of scare people. We've got to understand that a

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Speaker 1: lot of people are actually ahead in theary payment by years,

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Speaker 1: so they won't even get a tap on their shoulders

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Speaker 1: saying hey, increase your payments because they've got that buffer.

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Speaker 1: And a lot of people remember when they got their

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Speaker 1: loan the banks would have had to service it with

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Speaker 1: a three percent buffer. So let's say you got to

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Speaker 1: loan at two percent, they would have assessed that can

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Speaker 1: you afford this at five percent? So we haven't had

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Speaker 1: three percent total in rate heights yet it's only be

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Speaker 1: what one point at five So technically we should be okay.

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Speaker 1: But the thing is, we all went out and bent

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Speaker 1: up big. We got that second car, you know, we

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Speaker 1: do you know, we're renovating, we're getting TVs, so we've

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Speaker 1: got to curb back our spending now. And for a

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Speaker 1: lot of us, yeah, this rate hype will actually if

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Speaker 1: you're a new borough then Yeah, there's a lot of pain.

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Speaker 2: There is there an upside is that is this going

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Speaker 2: to temper inflation? Does this mean the cost of living

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Speaker 2: will go down? Is that the reason this has gone up?

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Speaker 1: Yeah, and there is an upside, could be a little downside.

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Speaker 1: So the devil was in the detail yesterday when they

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Speaker 1: made the announcement. It's the RBA notes that you've got

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Speaker 1: to look at closely because even they, the government selves,

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Speaker 1: that said that growth is going to fall. So they

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Speaker 1: predicted that we would have economic growth of around four

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Speaker 1: point twenty five at the end of the year. Now

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Speaker 1: they're contracting that back three point twenty five. Because you've

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Speaker 1: got to understand if you could increase interest rates, that

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Speaker 1: hurts households. They have less money to spend. If they

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Speaker 1: had less money to spend, they're not going out to dinner,

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Speaker 1: they're not shopping, they're not building, and that puts a

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Speaker 1: constraint on growth. They're also suggesting that unin we may

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Speaker 1: go up slightly, but it's nothing really to be concerned about.

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Speaker 1: You know, three point five to four, that's still a

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Speaker 1: very good number. But this is the problem. It's a

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Speaker 1: flying line, isn't it. You overshoot these interest rates, you

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Speaker 1: go out too hard, too fast. Let's say they go

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Speaker 1: up with another point five percent Raysie, that could be

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Speaker 1: enough to really tip the economy over. And you know

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Speaker 1: this dreaded our word. Most economists are saying no, don't

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Speaker 1: expect it to happen. The RBA is saying no because

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Speaker 1: obviously the growth ballcass even though it's down, it's not

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Speaker 1: a negative territory. You know, if we do overshoot, it

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Speaker 1: is possible. I mean we're looking at the US. They're

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Speaker 1: not saying it's a recession because they've got that tight

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Speaker 1: labor market, but they've had two consecutive quarters.

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Speaker 3: And you don't want to do a Turkey in Turkey.

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Speaker 3: They just ignored it, and there are in all sorts

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Speaker 3: of trouble.

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Speaker 1: Turkey's inflation is out of this world. No, you don't

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Speaker 1: want to go to Turkey, that's for sure.

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Speaker 3: And interesting with the front page of the newspaper that

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Speaker 3: had Philip Lowe, so he's the governor of the RBA,

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Speaker 3: and he was like front page yesterday, was heading off

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Speaker 3: to his office and he was dressed, you know, sort

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Speaker 3: of modestly, and he had a little backpack and he

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Speaker 3: was carrying like a sandwich or like in a brown

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Speaker 3: paper bag. The big discussion around work what was he eating?

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Speaker 3: Because Amanda was saying it was some sort of artists

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Speaker 3: or artisan life.

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Speaker 2: It just seemed too big to be a meal. I

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Speaker 2: thought he'd bought a loaf of bread. Maybe he's on

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Speaker 2: his way home.

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Speaker 3: And jim Y, right, what did you say? It's not

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Speaker 3: it's lunch time. He's not in a bacon egg roll,

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Speaker 3: I said a chicken stentzal role. Would you care to

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Speaker 3: weigh in on this?

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Speaker 1: What these pictures? I'm looking at it right now. He

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Speaker 1: looks like a schoolboy. What this picture says to me

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Speaker 1: is that he does not have a mortgage. Because anyone

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Speaker 1: that can buy a sandwich that big, because yes, and

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Speaker 1: is not bringing their lunch to work, I would say

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Speaker 1: they don't have a mortgage.

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Speaker 3: Yeah, Happy days for Philip, Happy happy days for Philip. Well,

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Speaker 3: if you thank you so much for joining us Real

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Speaker 3: Money with f he's our host the podcast downloaded today

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Speaker 3: on your favorite podcast. And if you just tell us

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Speaker 3: everything's going to be okay, isn't it?

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Speaker 1: Everything's going to be okay? Jonsy? Or look, can I

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Speaker 1: just I've already seen one major bank rise rate, raised rate,

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Speaker 1: so it would be interesting to see how others will follow.

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Speaker 1: And Macquarie is up still the lining. They did increase

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Speaker 1: some of the savings as well.

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Speaker 3: Okay, so this is good news. Ef you.

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Speaker 2: Thank you, all right, thank you if you appreciate it.