The head of a mortgage aggregator says the outcome of the US election is a potential “powder keg” for the global economy and is likely to rattle Australian markets.
Finsure boss and 1300 Home Loan managing director John Kolenda said the Reserve Bank had no choice but to keep official interest rates on hold yesterday as the world awaits the outcome of the United States presidential election.
Mr Kolenda said the US election, which will deliver the White House to either Democrat Hillary Clinton or Republican challenger Donald Trump, will have massive economic consequences, particularly for Australia.
“The US election outcome is a potential powder keg for the global economy and it is likely to cause some turbulence for the Australian dollar,” he said.
“It would seem unwise for the RBA to tinker with its cash rate while the race for the White House appears to be on a knife edge in the latter stages of the US presidential campaign.”
Mr Kolenda said although the RBA has this month maintained its cash rate at a record low of 1.5 per cent, good deals remain on offer for home loan customers.
“With the intense competition between lenders, borrowers don’t need to wait for the RBA to make a move and in the current lending climate you can secure a lower rate independently of an RBA decision and save money,” he said.
“Every variable home loan interest rate should start with the number three and anybody paying more than 4 per cent is paying too much, and that includes fixed rates.”
Mr Kolenda said while the RBA elected not to make a Melbourne Cup Day rate cut, the central bank has lowered its cash rate in December three times since 2008.
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