Pimco Sees Aussie Mortgage Rates Rising as Rules Squeeze BanksBy
RBA benchmark capped at 2% in 2016, easing bias stays: Pimco
Fund manager sees evidence of rebalancing not recessing
Australian borrowers will probably face higher interest rates next year as lenders pass on the expense of meeting new regulations, adding to the headwinds for a sluggish economy, according to Pacific Investment Management Co.
Home-owners have already seen mortgage payments increase this year after the nation’s four largest banks added 17.5 basis points on average to their variable rates, citing the cost of holding more capital. Pimco, with about $1.5 trillion in assets under management worldwide, expects that margin pressure to help ensure the Reserve Bank of Australia doesn’t raise its benchmark rate from a record-low 2 percent, according to the fund manager’s 2016 outlook for Australia released on Tuesday in Sydney…
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