US rate cut puts pressure on RBA — and things could get heated

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US rate cut puts pressure on RBA — and things could get heated
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The big US move will certainly make the RBA's stance harder to explain to families having trouble paying their mortgage costs and living expenses.

Reserve Bank Governor Michele Bullock might need her flak jacket when she fronts the media next Tuesday after the bank's two-day board meeting.

Thursday's strong Australian employment numbers again showed the paradox of a buoyant labour market in an economy that's barely breathing.Regardless of the debate about rates among the experts, the big US move will certainly make the RBA's stance harder to explain to families having trouble paying their mortgage costs and living expenses.

"This includes things like cutting back on their spending to the more essential items, trading down to lower quality goods and services, dipping into their savings or working extra hours."A really important point to note here, is that lower income borrowers are over-represented in the group of people who are really struggling," she said.The person faced with selling their home doesn't take comfort from being in a small minority.

The monthly CPI figures are less reliable than the quarterly ones. But if the August numbers are good, many voters are likely to be angered by the bank having sat on its hands. Peter Dutton's strategy of holding back until closer to the election most details of what a Coalition government would do has tactical advantages and drawbacks.

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