Financial expert Mark Bouris has a sombre forecast for Australians who will be watching tomorrow’s Reserve Bank announcement on interest rate increases.
The chairman of Yellow Brick Road claims he believes the board will increase the amount once more and continue to do so until a crucial threshold is reached.
In an interview with economist Stephen Koukoulas that he shared on Instagram, Bouris suggested that the key statistic to pay attention to was unemployment.
“I’m going to say there’s a rate hike,” Bouris declared.
The sole justification for my statement is that (RBA deputy governor) Michelle Bullock’s report, published last Tuesday, discussed unemployment at 4.5%.
Rate increases would probably continue until the jobless rate hit that point, according to Bouris.
Bullock recently sparked debate when she claimed that in order to stop inflation, the unemployment rate would need to increase.
It currently stands at 3.5%.
According to Koukoulas, a 1% increase would result in an additional 140,000 people being out of work.
The non-accelerating inflation rate of unemployment (NAIRU), which the RBA itself defines as “the lowest unemployment rate that can be sustained without causing wages growth and inflation to rise,” is taken into account in its calculations.
According to Koukoulas, there is “clear evidence” that the jobless rate has halted decreasing.
