The Deputy Governor of the Reserve Bank of Australia (RBA), Michelle Bullockhas spoken at a business lunch organized by the Economic Society of Australia, in Brisbane.
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will be necessary further rate hikes in coming months.
Risks to household financial stability “are a bit high”but are unlikely to be substantial.
Risks will be important in deciding the size and timing of future interest rate hikes.
The risks will be seen influenced by the future path of employment growth.
The current strong job growth means that people will have work to pay their mortgages.
The aggregate financial balance sheets of households are in very good shape.
Households have saved a huge amount of money since the start of the pandemic.
The most heavily indebted borrowers also tend to have the most liquidity which refers to the ability of a financial instrument to be bought or sold without causing price fluctuations.
The household sector as a whole has accumulated considerable wealth thanks to rising house prices.
Home prices would have to fall quite a bit for negative equity to become a systemic concern.
Much of the debt is held by high-income households that have the capacity to service their debt.
Source: Fx Street
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