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Interest Rates - Why reporters are sick of predictions of rising home loan interest rates

A News.com.au finance writer recently started their article with 'Welcome to Groundhog Day for home loan interest rate predictions'. And he's right.

He also said that 'January is a popular time for forecasting and for several of the past seven Januarys I've been reading and writing about economists' expectations that the Reserve Bank of Australia would increase its official interest rate.'

It's been an interesting year in 2017 with rising interest rates predicted for all of the second half of the year, although none appearing, and in the midst of the rise (and fall) and rise (and fall) of crypto currencies, the announcement of the banking Royal Commission, which began in February and the possibility of other new banking initiatives like facial recognition. I recently chatted about these new possibilities here.

The article writer, Anthony Keane wrote that 'interest rates moves are used as a tool by the RBA to cool things down when the economy and inflation are rising too quickly or to speed things up when they are weak. As our economy is putting along with mediocre growth and inflation is still on the low side, there is still little reason for it to act.'

He also added that 'most of the economists who think that there will be a rate rise this year expect only one' and hopefully he's right as this is good news for home owners.

This means that it's a great year to add as much as you can into your home loan redraw or offset account; it's a great year to make a difference to your loan position.

I'll be chatting more about interest rates soon.

The original news article is here.

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