Why is everyone talking about Interest Rates? | BTN High

Across Australia, hundreds of thousands of households are under financial stress because of rising interest rates. So, what are they?

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[PaddyAU]

Reality interest rates need to rise substantially more. $800 billion printed by the RBA. Low rates since gfc have caused massive Bubble in all asset classes

[cameronmale]

The explanation of inflation is only for demand pull... There is also cost-push inflation, from externalities, as what we're experiencing. There is a strong argument that the impact of interest rate rises will have limited effect, due to the fact only 33% of household have a mortgage (and rental increases take 6-12months to be felt) and that changes to international trade have restructured the international economy (market concentrations, demographics, re-shoring, near shoring, supply shortages and geopolitical conflict and tensions) in a way that a new era of trade now exists and that inflation will be persistent, despite reduced money supply (growth) - aka stagflation.

Changes to inflation may be coincidental rather than consequential and may not drop to the 2-3% banding the RBA arbitrarily sets. Like most of economics, we the public only know after the fact and that the RBA has a fantastically terrible record of predicting ANY indicator - wage growth predictions are hilarious.

[joebloggs]

Everyone blaming the RBA for "burying" them but were okay taking maxxed out loans thinking they had the asset. Physically, yes, but owed to the bank. They buried themselves, willingly, in the hope of 20%+ per annum increases! That number in itself rings alarm bells that chime in unison:
UNSUSTAINABLE

[michaelandrews]

Because housing in Australia is disgracefully highly priced so some can get richer and richer while the rest of us get poorer.

[GlasgowCelticBhoy]

Although I don't take pleasure in seeing anyone lose their home, my pity well is pretty much dry. Unfortunately, some folk didn't take personal responsibility for what they were borrowing, living in the moment of ultra low interest rates without stress testing themselves. Financial literacy is appalling in this country.

So now we have ridiculously inflated house prices that have ultimately locked a sizeable chunk of the younger generation out of the market - many of their hopes and dreams are dashed. And those that FOMO'd in played their part in creating this mess. They are now the ones screaming at the RBA as they struggle to afford what they bought. Maybe some self-reflection is required instead?

We need this bubble to burst, we need houses to be a lower multiple of peoples incomes again. If high interest rates is the medicine that is required, then so be it.

[soknya]

are you planning to rob a bank again, Professor?

[vchar]

Controlling the inflation is crucially important but the more important thing is life. Everyone needs to live thus they can’t rely on someone who solve the problem by just reading books. The problem solvers need to be more creative and considerate.

[starlitelemming]

This whole situation is moronic. Record low interest rates pushed house prices up to unaffordability. THAT'S why we can't afford our rent or to buy a house (amongst other things). Interest rates SHOULD be around 5-7%. Of course they were going to rise -- and will keep rising! How about we talk about things that actually matter? Like the fact anyone on a Disability Pension is paying 80% of their income on rent (because Rent Assistance hasn't kept up with rental increases). Or that the lower half of the housing market is still rising, NOT falling in the way that the news constantly reports misleadingly (only the top of the housing market is falling, which is essentially meaningless to the very rich people who own houses in that bracket).

ABC, how about you stop looking at simplistic and meaningless numbers (eg: median house price, cash rate, unemployment rate) and do some proper research into numbers that actually represent what's hurting people (eg: underemployment, long term unemployment, changes in the bottom of the housing market, regional rents). By ignoring the detail, you miss the entire story.

As for everyone else, how about revising your primary school arithmetic? If you don't know what "interest" is, you don't deserve to raise children.

[detectiveofmoneypolitics]

Economic investigator Frank G Melbourne Australia 🇦🇺 still watching this very informative content cheers Frank

[potapotapotapotapotapota]

if you show 0% interest towards something you will get nothing in return !

[robbie]

It needs to be done. Due to inflation and the market conditions