Entrepreneur and Yellow Brick Road Chairman Mark Bouris has issued a grim warning about the country’s interest rates, suggesting that the Reserve Bank’s past behaviour indicates further increases are likely.
The RBA ended the trend of ten consecutive cash rate increases on Tuesday, opting to hold rates at 3.60 per cent.
RBA Governor Philip Lowe justified the decision by saying inflation may have peaked, with the rate dropping back to 6.8 per cent in March.
But Mr Bouris said he hasn’t been filled with positivity from what he’s heard from the RBA.
“Whatever way you can read this latest statement, I’m worried,” he said.
“On one hand he’s saying I wanna wait and see whether or not we’ve gone too hard. so in other words things could fall out of the tree… the whole economy,” he told Sky News Australia’s Peter Stefanovic on First Edition.
“On the other hand he’s saying: by the way, if inflation isn’t under control, which we remain concentrated on getting inflation back to 2-3 per cent, we’re going to keep putting rates up.
“I don’t know which way to feel. I don’t feel good about anything he said at all. This is just a pause, nothing else.”
The Reserve Bank has come under fire for its repeated rate hikes, which have left many families struggling to keep pace with repayments.
Governor Lowe faced a Senate Estimates committee back in February to address the criticism, with Greens senator Nick McKim calling on him to resign.
Mr Bouris said he shared fears of homeowners affected by the persistent rate increases.
“What concerns me most of all… is that there is no human impact analysis in relation to these interest rate rises, they’re all just about data,” he said.
“Data says this, data says that, let’s put rates up because of what data says.
“What about the impact on people? Nobody’s actually looking at that. I just wish somebody would go and do a proper study on this and work out what is the impact on people.”
The businessman issues a grim warning about the likelihood of further interest rate increases if inflation doesn’t continue to decline.
“If inflation doesn’t come down from 6.8 per cent and if wages keep pressing upwards – as they are doing – then there’s every chance we could get two or three more rate rises. And a lot of people are still saying 4.25 has been the terminal rate,” Mr Bouris said.
House prices experienced a slight revival in March according to CoreLogic data, but Mr Bouris thinks it was just a “little blip.”
“There’s no way in the world that we’re going to see house prices rise,” he said.
RBA’s decision to pause the interest rates represents a break from ten consecutive rate hikes since April 2022, from a historic low of 0.1 per cent.
News Source: www.skynews.com.au