Is it finally the end of interest rate hikes in December?

After more than 6 months of Reserve Bank cash rate increases which have translated into higher variable home loan rates and repayments, the big question is whether it will continue in December.

With retail sales suffering their first decline in 2022 for the month of October, there are suggestions that the actions of the Reserve Bank may be working as intended. With the October decline, the question is now being asked as to whether increased living costs pressures and continuous interest rate rises have had their desired effect and are causing Australians to ease up on spending.

Just today in the US, their equivalent of the Reserve Bank - the US Federal Reserve Board - have signalled that they could slow the pace of rate rises next month. This could translate into smaller interest rate increases in the US than what have been used to date. Like Australia, the US Reserve has been handing out repeated rate hike increase in 2022, in it's efforts to curb high inflation.

There is the old adage 'when the US sneezes, the world catches a cold'. Often we here in Australia are impacted by the international state of affairs. Will this have any bearing on our own Reserve Bank decisions? Time will tell.

The next meeting of our Reserve Bank is next week on the 6th December. The question will be whether the Reserve Bank will lift the official cash rate by a further 0.25% or whether Santa could come early and give Australians a reprieve with a pause in rate rises.

The fact that the Reserve Bank doesn't meet in January places all the more emphasis on the importance of next week's Reserve Bank meeting. Whatever decision is made will it will carry us through to the next meeting in February 2023.

We will all wait with baited breath for next week. Stay tuned.