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US Crisis Good For Australia

US Crisis Good For AustraliaThe current run on US banks and American bank collapses could actually spell good news for Australian mortgage holders.

The banking turmoil in the United States means its Federal Reserve is rethinking whether it will continue with aggressive interest rate rises.

The collapse of US banks is likely to take some steam out of its economy and inflation and reduce the need for further rate rises.

While Australia has experienced ten consecutive rate rises, the interest rate is still well below the US.

The Reserve Bank of Australia has cautiously been trying to bring down inflation through rate rises without causing a recession.

Australia’s banking sector is often affected by what other members of the global central bank community do, therefore a halt in US rate rises could have a positive effect on what the RBA does in Australia.

At the start of the Global Financial Crisis, when US banks collapsed the RBA slashed interest rates in Australia.


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