I just posted the RBA Melbourne Cup Day monetary policy meeting preview
Yesterday I posted a couple of pre-previews (I know, not actually a word):
- Nobody knows what the RBA board will do on Tuesday ... the board itself doesn't know
- RBA 'shadow board' says to keep Australian cash rate on hold
But, well now for the 'tin hat', the conspiracy theory version.
Back on October 14 I posted on Westpac raising their mortgage rates. In the following week and a half the other 3 major Australian banks jacked up their rates too.
Hiking mortgage rates in Australia gets a lot of media attention (bile, disgust, loathing, hatred ... Aussies don't like their mortgage rates going up and the media are happy to play along and stoke the bonfires). Westpac copped the brunt of it, being first, but the others weren't spared as they joined in.
What would have been much easier on the banks would have been if the RBA cut rates and the banks didn't pass along the full cut. Sure, there would have been hate and bile etc., but it wouldn't have been so intense and I reckon the banks might have preferred to go down this path.
(OK, now I did say this was the tin hat version, so read on with that in mind ...) I reckon the banks may very well have sounded out the RBA on if the central bank was likely to cut rates in the near future (so the commercial banks could obfuscate their own margin improvement by not passing on the full cut to mortgages) ... and they got a 'No' from the central bank. I don't know for sure, of course, but it has occurred to me. Especially as none of the major banks are tipping a cut today.
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Thoughts welcome in the comments, of course.
