Latest news with #DianaMousina
The Advertiser
10-08-2025
- Business
- The Advertiser
Hopes RBA won't repeat shock rates hold as board meets
Markets are almost certain the Reserve Bank of Australia will cut interest rates at its August meeting despite the board facing an increasingly uncertain environment. Benign quarterly inflation figures released by the Australian Bureau of Statistics in July should convince the board to cut the cash rate in a two-day meeting that starts on Monday, AMP deputy chief economist Diana Mousina said. In fact, a cut of 25 basis points to 3.6 per cent should have happened already, Ms Mousina said. Mortgage holders will be hoping lighting doesn't strike twice after the central bank's board voted in a 6-3 decision to leave rates on hold in July, despite markets pricing in a near-certain chance of a cut. The majority of economists also expect a cut this time around, including 31 out of 34 experts surveyed by comparison website Finder. But with markets predicting another two cuts following this one, RBA governor Michele Bullock is likely to try to pare back expectations in her post-meeting communications after the meeting wraps up on Tuesday. "We think that the RBA will still sound cautious on giving too much forward guidance and remain of the view that interest rates do not need to be aggressively cut for now, given their concern that upside inflation risks may occur again in Australia," Ms Mousina said. Another potential concern for Ms Bullock could be developments at the US central bank. Ms Mousina said we could be seeing the "Trumpification" of the Federal Reserve after the US president's appointment of ally Stephen Miran to replace departing governor Adriana Kugler. Mr Miran's appointment heralds a more dovish Fed board, which could mean lower US interest rates if Donald Trump gets his way. "Stephen Miran's appointment to the Federal Reserve board will likely increase pressure for deeper rate cuts while broadening concerns around Fed independence," JP Morgan chief economist Bruce Kasman said. While the RBA has been more focused on domestic developments in recent months, the Fed's outsized influence on global borrowing costs can set the tone for International monetary policy. When the Fed cuts, central banks around the world have tended to follow. And a dovish turn could have consequences for the Australian dollar, investor expectations and the broader economy. Markets are almost certain the Reserve Bank of Australia will cut interest rates at its August meeting despite the board facing an increasingly uncertain environment. Benign quarterly inflation figures released by the Australian Bureau of Statistics in July should convince the board to cut the cash rate in a two-day meeting that starts on Monday, AMP deputy chief economist Diana Mousina said. In fact, a cut of 25 basis points to 3.6 per cent should have happened already, Ms Mousina said. Mortgage holders will be hoping lighting doesn't strike twice after the central bank's board voted in a 6-3 decision to leave rates on hold in July, despite markets pricing in a near-certain chance of a cut. The majority of economists also expect a cut this time around, including 31 out of 34 experts surveyed by comparison website Finder. But with markets predicting another two cuts following this one, RBA governor Michele Bullock is likely to try to pare back expectations in her post-meeting communications after the meeting wraps up on Tuesday. "We think that the RBA will still sound cautious on giving too much forward guidance and remain of the view that interest rates do not need to be aggressively cut for now, given their concern that upside inflation risks may occur again in Australia," Ms Mousina said. Another potential concern for Ms Bullock could be developments at the US central bank. Ms Mousina said we could be seeing the "Trumpification" of the Federal Reserve after the US president's appointment of ally Stephen Miran to replace departing governor Adriana Kugler. Mr Miran's appointment heralds a more dovish Fed board, which could mean lower US interest rates if Donald Trump gets his way. "Stephen Miran's appointment to the Federal Reserve board will likely increase pressure for deeper rate cuts while broadening concerns around Fed independence," JP Morgan chief economist Bruce Kasman said. While the RBA has been more focused on domestic developments in recent months, the Fed's outsized influence on global borrowing costs can set the tone for International monetary policy. When the Fed cuts, central banks around the world have tended to follow. And a dovish turn could have consequences for the Australian dollar, investor expectations and the broader economy. Markets are almost certain the Reserve Bank of Australia will cut interest rates at its August meeting despite the board facing an increasingly uncertain environment. Benign quarterly inflation figures released by the Australian Bureau of Statistics in July should convince the board to cut the cash rate in a two-day meeting that starts on Monday, AMP deputy chief economist Diana Mousina said. In fact, a cut of 25 basis points to 3.6 per cent should have happened already, Ms Mousina said. Mortgage holders will be hoping lighting doesn't strike twice after the central bank's board voted in a 6-3 decision to leave rates on hold in July, despite markets pricing in a near-certain chance of a cut. The majority of economists also expect a cut this time around, including 31 out of 34 experts surveyed by comparison website Finder. But with markets predicting another two cuts following this one, RBA governor Michele Bullock is likely to try to pare back expectations in her post-meeting communications after the meeting wraps up on Tuesday. "We think that the RBA will still sound cautious on giving too much forward guidance and remain of the view that interest rates do not need to be aggressively cut for now, given their concern that upside inflation risks may occur again in Australia," Ms Mousina said. Another potential concern for Ms Bullock could be developments at the US central bank. Ms Mousina said we could be seeing the "Trumpification" of the Federal Reserve after the US president's appointment of ally Stephen Miran to replace departing governor Adriana Kugler. Mr Miran's appointment heralds a more dovish Fed board, which could mean lower US interest rates if Donald Trump gets his way. "Stephen Miran's appointment to the Federal Reserve board will likely increase pressure for deeper rate cuts while broadening concerns around Fed independence," JP Morgan chief economist Bruce Kasman said. While the RBA has been more focused on domestic developments in recent months, the Fed's outsized influence on global borrowing costs can set the tone for International monetary policy. When the Fed cuts, central banks around the world have tended to follow. And a dovish turn could have consequences for the Australian dollar, investor expectations and the broader economy. Markets are almost certain the Reserve Bank of Australia will cut interest rates at its August meeting despite the board facing an increasingly uncertain environment. Benign quarterly inflation figures released by the Australian Bureau of Statistics in July should convince the board to cut the cash rate in a two-day meeting that starts on Monday, AMP deputy chief economist Diana Mousina said. In fact, a cut of 25 basis points to 3.6 per cent should have happened already, Ms Mousina said. Mortgage holders will be hoping lighting doesn't strike twice after the central bank's board voted in a 6-3 decision to leave rates on hold in July, despite markets pricing in a near-certain chance of a cut. The majority of economists also expect a cut this time around, including 31 out of 34 experts surveyed by comparison website Finder. But with markets predicting another two cuts following this one, RBA governor Michele Bullock is likely to try to pare back expectations in her post-meeting communications after the meeting wraps up on Tuesday. "We think that the RBA will still sound cautious on giving too much forward guidance and remain of the view that interest rates do not need to be aggressively cut for now, given their concern that upside inflation risks may occur again in Australia," Ms Mousina said. Another potential concern for Ms Bullock could be developments at the US central bank. Ms Mousina said we could be seeing the "Trumpification" of the Federal Reserve after the US president's appointment of ally Stephen Miran to replace departing governor Adriana Kugler. Mr Miran's appointment heralds a more dovish Fed board, which could mean lower US interest rates if Donald Trump gets his way. "Stephen Miran's appointment to the Federal Reserve board will likely increase pressure for deeper rate cuts while broadening concerns around Fed independence," JP Morgan chief economist Bruce Kasman said. While the RBA has been more focused on domestic developments in recent months, the Fed's outsized influence on global borrowing costs can set the tone for International monetary policy. When the Fed cuts, central banks around the world have tended to follow. And a dovish turn could have consequences for the Australian dollar, investor expectations and the broader economy.
Daily Mail
06-08-2025
- Business
- Daily Mail
Why boomers are now the generation suffering the most from the cost-of-living crisis
Baby boomers on the age pension are now suffering more from the cost-of-living crisis than young workers despite easing inflation. Working-age Australians were previously suffering the most when inflation approached levels last seen in 1990 and the Reserve Bank raised interest rates 13 times in 2022 and 2023. But two rate cuts in 2025 and the lowest inflation since the Covid lockdowns four years ago mean age pensioners are now having a tougher time than younger Aussies with a job. New Australian Bureau of Statistics data released on Wednesday showed living costs for those on the age pension had risen by 2.7 per cent during the June quarter. By comparison, employee living costs rose by 2.6 per cent over the year, and saw the smallest quarterly rise in expenses since early 2022 before the aggressive rate hikes. Both living cost measures were well above the 2.1 per cent headline inflation rate, which was the lowest since the March quarter of 2021 and on the low side of the Reserve Bank's two to three per cent target. AMP deputy chief economist Diana Mousina said employees were now having an easier time because they benefited the most from rate cuts, unlike most age pensioners who have paid off their house. 'Because the employees have had a larger upward increase in growth, in the times of high interest rates, they are seeing better outcomes now,' she told Daily Mail. 'They've actually had a larger fall in the cost of living only because they went up by more. 'There are very few age pensioners that still have a mortgage.' During the past year, the living costs of employees have been moderating more dramatically, following the RBA rate cuts in February and May. 'This rise was partly offset by falls in mortgage interest charges, which make up a higher proportion of expenditure for employee households,' the ABS said. The two rate cuts this year have shaved $218 off mortgage repayments on an average $660,000 home loan. The futures market is now expecting the RBA to cut rates three more times by Christmas, which would take the cash rate from 3.85 per cent now to 3.1 per cent for the first time since February 2023. This is more likely to ease the living costs of workers more than boomers, who are more likely to have paid off their home. Rents are increasing at a level beyond inflation but they are no longer going up by double-digit figures annually after immigration moderated from record-high levels approaching 550,000 in late 2023. Those on the age pension, who are more likely to have paid off their homes, are now seeing a bigger increase in living costs than workers. That's because their expenses haven't moderated as much, as their income from government payments fails to keep pace with some big-moving price items like healthcare and food. Australians must be 67 to qualify for the age pension, meaning only boomers and the elderly fall into this category. But self-funded retirees, with high super balances and investments, had the lowest living cost increase of 1.7 per cent, which was below the inflation rate. They can also live without needing the age pension, which is subject to an assets test. This group also benefited from strong superannuation returns, with retirement savings tax free after 60 for those no longer working. 'Self-funded retirees, for example, would be getting quite strong benefits from the impacts of investment returns,' Ms Mousina said. 'Investment returns have been extremely strong in the past few years and that's benefited retirees, on average, quite a lot - not those on the age pension. 'Interest rates have been high - they've benefited from that despite the fact they've had higher inflation. 'Just retirees in general in Australia, they've actually had a very good situation in the last two to three years.' They also had more to spend on non-essential items like holidays. 'Medical, dental and hospital services, and holiday travel and accommodation make up a larger proportion of expenditure for self-funded retiree households than they do for other household types,' the ABS said. The Association of Superannuation Funds of Australia recommends $595,000 in super for a comfortable retirement for single retirees, which means an overseas trip every seven years. For a couple, that rises to $690,000. Those on Centrelink welfare payments had the biggest living cost increase of 2.9 per cent and are more reliant on federal and state government electricity rebates. 'Households represented by these indexes source their principal income from government payments,' the ABS said. While payments like JobSeeker unemployment benefits are indexed for inflation, welfare recipients are experiencing more pain at the shops because services inflation is still high at 3.3 per cent.
ABC News
08-07-2025
- Business
- ABC News
Why keeping rates on hold could be costly, says AMP's deputy chief economist
AMP's Deputy Chief Economist Diana Mousina speaks to The Business shortly after the Reserve Bank of Australia's shock decision to hold the cash rate steady at 3.85 per cent.
Sky News AU
08-07-2025
- Business
- Sky News AU
Rate relief expected as RBA is tipped to cut cash rate
AMP Deputy Chief Economist Diana Mousina says a rate cut is likely as the Reserve Bank looks to protect the Australian economy from weakening global conditions. "We think that including today's rate cut, we are going to get another four from here, so basically, we are seeing the cash rate ending somewhere at just under 3 per cent after a peak of 4.35 per cent," Ms Mousina told Sky News Australia. "Australia is only four or five per cent of US total imports – we're such a small share of that, our baseline tariff rate is not going to be very high." "We're not going to be impacted directly, and I think even the indirect impacts from potential flow onto China is going to be quite minimal."
Business Recorder
01-07-2025
- Business
- Business Recorder
Australia, NZ dollars make most of US dollar malaise
SYDNEY: The Australian and New Zealand dollars paused near multi-month peaks on Tuesday after clearing another set of chart barriers to set the seal on a strong quarter, with the US currency still stuck in a broad downtrend. The Aussie held at $0.6575, having climbed 0.7% overnight to an eight-month top of $0.6584. The next bull target is at $0.6687, with support around $0.6510 and $0.6485. The kiwi dollar stood at $0.6093, after finally cracking the previous $0.6088 high to a nine-month peak of $0.6099. Resistance now lies at $0.6119 and $0.6292, with support at $0.6057 and $0.6040. The gains left the Aussie up 5.3% for the second quarter and the kiwi 7.4% higher, though the gains were mostly a function of US dollar weakness and both currencies lost ground to their European counterparts. Policymakers at the Reserve Bank of Australia have noted the US dollar's atypical weakness amid recent periods of risk aversion and a darkening global outlook. This has kept the Aussie firmer than it would normally have been and limited the competitive support it provides to exports. 'Longer term, if the USD loses its safe haven status then the Aussie may fall less in times of uncertainty which will impact its role as a shock absorber for the Australian economy,' said Diana Mousina, a deputy chief economist at AMP. 'This may put more pressure on the RBA to support growth in time of global shocks.' Minutes of the RBA's last meeting showed the board discussed the lack of extra stimulus from the Aussie, which added to the case for a cut in rates. The same will likely be true when the RBA meets next week and is one reason investors are pricing in a 95% chance it will cut the cash rate by 25 basis points to 3.60%. Expectations are so strong that even an upside surprise from retail sales data due on Wednesday is unlikely to move the dial. Median forecasts are for a rise of 0.4%, but analysts at the major local banks see a chance of a higher number based on their measures of card spending. Growth in overall household consumption is still running well short of the RBA's projections and supports market wagers for further easing to 3.10% by year-end, and maybe an ultimate floor of 2.85% which would put it in stimulative territory.
