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Hold the champagne — these rate cuts are ‘weird’ and sending us a warning

3AW BREAKFAST

Business guru Terry McCrann says the latest rate cut is a huge wake-up call to business, the government, the opposition and the banks.

The Reserve Bank of Australia has cut interest rates by 0.25 per cent, bringing interest rates to an historic low of 1 per cent.

It’s the first time since 2012 that the RBA has cut interest rates twice in consecutive months.

The winners and losers of the historic interest rate cut

It’s a boon for homeowners and buyers, with most of the banks passing on the cut.

But Herald Sun finance expert McCrann described the record-low rates as “weird”, and a massive wake-up call.

“One per cent is not where interest rates should normally be.

“It’s really telling us … the economy is paddling.

“The Reserve Bank is not saying ‘It’s run in the streets, panic time’, but the economy needs some boost.

“(It’s also saying) ‘Hey guys — especially those people in Canberra — we can’t do it all. We need you to come to the party as well, and we need tax cuts to put money into the hands of consumers.

“They’ve really got to put the national interest (first).

“You would hope that the Labor party will recognise you can get back to politics later down the track, but up front they need to make it easy for those tax cuts to go into the hands of people.”

(Image: WILLIAM WEST / Getty Images)

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