A lot of changes have happened recently due to the ongoing cost of living crisis.

This 2024, Australia's economic landscape is set to face a significant shift, with a leading economist warning of a potential recession.

The cause? A rapid and brutal rise in interest rates.

This 'day of reckoning', as it's been ominously dubbed, could have far-reaching implications for Australians, affecting everything from home loans to business costs and the overall cost of living.

AMP's Deputy Chief Economist, Diana Mousina, has raised the alarm, stating that there's a 40 per cent risk of a recession in Australia.

The Reserve Bank of Australia has increased the cash rate 13 times over the past 19 months, which has led to increased interest rates. Image source: Shutterstock.

This comes in the wake of one of the most intense cycles of rate rises by the Reserve Bank of Australia (RBA).

Over the past 19 months, the RBA has rapidly increased the cash rate 13 times, catapulting interest rates from 0.10 per cent to a staggering 4.35 per cent.

The RBA's hand was forced due to soaring inflation, necessitating these rate hikes to keep prices in check.

However, this has resulted in increased costs for homeowners and businesses alike.

'Usually, whenever we get a very significant increase to interest rates, just like we've had right now, there is some sort of reckoning—a day of reckoning—or some sort of crisis that eventuates through that,' Ms Mousina warned during a recent AMP webinar.

Drawing parallels with the recent closure of banks in the US in March and historical data showing that tightening by the Federal Reserve often leads to crisis, predicting a potential economic downturn in 2024.

'I think that we will see some other sort of…whether it’s a mini-crisis or some sort of more significant economic downturn in 2024,' she said.

The looming economic headwinds suggest softer global growth or even a recession in the coming months.

Mousina hopes for a mild recession, given the positive savings buffers that consumers currently have, which could potentially shield them from a downturn.

'But it is still a risk for next year,' Ms Mousina added.

The current situation bears an uncanny resemblance to the recession of the early 1990s.

'The RBA kept increasing the cash rate—everything looked OK. The unemployment rate fell quite significantly, and then the unemployment rate started rising very, very quickly again as we went into that recession, and the RBA cut rates quickly,' she explained.

'Things can seem OK when they’re not, which is why financial markets are still pricing in a decent chance for a recession.'

Despite Australia's historically low unemployment rate, which stood at 3.8 per cent in November 2023, many Australians are grappling with the high cost of living due to inflation.

Inflation peaked at 7.8 per cent in December 2022, and the most recent figures still show a high rate of 5.4 per cent, according to the Australian Bureau of Statistics.

An inflation rate of between 2 and 3 per cent is the ideal measure for price growth, according to economists.

Key Takeaways

• AMP Deputy Chief Economist Diana Mousina has issued a warning about a potential economic crisis in Australia due to rising inflation and interest rates.
• The Reserve Bank of Australia's aggressive rate hikes, from 0.10 per cent to 4.35 per cent in 19 months, are seen as a significant factor contributing to the risk of recession.
• Historical data suggests a link between the rapid tightening of monetary policy by central banks and subsequent economic crises, with recent US bank closures cited as a possible early warning.
• Despite low unemployment rates, the high cost of living and persistent inflation are putting pressure on Australian consumers, with a potential mild recession forecasted for 2024.

What are your thoughts on the potential 'day of reckoning'? Share your thoughts with us in the comments below.

 

[maggiej]

While it seems that we are always being warned of doom and gloom with interest rates etc I can remember the days when we had a 13% interest rate on our home/ We had 4 children so it was wise to be careful. Fortunately we did not smoke and my husband only occasionally would have an alcoholic drink/ We lived within our means which is what the younger generation seem unable to do. We did not have holidays although the children went to camps run by youth groups but we did not.

 

[Blob]

SO glad BUSINESSES are also mentioned as being affected by Risen Interest rates. Usually , lazy Journalists only think of HOMEowners suffering. (WHICH is certainly very real.) Businesses, with Bank borrowings, EMPLOY people. MORE than the inefficient and bloated, gravy train Public Service ! They suffer LABOR's Taxes and Idealistic Red tape regulation, and Minimum wages, causing Weekend closures. Socialist Labor loves taxing business, and destroys their wealth with jealousy. Vote for more of them at your peril.

 

[Babbie]

While it seems that we are always being warned of doom and gloom with interest rates etc I can remember the days when we had a 13% interest rate on our home/ We had 4 children so it was wise to be careful. Fortunately we did not smoke and my husband only occasionally would have an alcoholic drink/ We lived within our means which is what the younger generation seem unable to do. We did not have holidays although the children went to camps run by youth groups but we did not.

Exactly. When my husband and I bought our first home we were paying a19 percent interest rate. We also lived within our means. I worked night shift, so my daughter didn’t have to go to daycare. These days words like crisis, horrific, catastrophic are always used. It seems like journalists love to terrorise people. Perhaps some of them need to go to the Ukraine or the Middle East and have a few bombs explode around them, maybe then they will ‘get it’ .

 

[Ian Crane-Luff]

A lot of changes have happened recently due to the ongoing cost of living crisis.

This 2024, Australia's economic landscape is set to face a significant shift, with a leading economist warning of a potential recession.

The cause? A rapid and brutal rise in interest rates.

This 'day of reckoning', as it's been ominously dubbed, could have far-reaching implications for Australians, affecting everything from home loans to business costs and the overall cost of living.

AMP's Deputy Chief Economist, Diana Mousina, has raised the alarm, stating that there's a 40 per cent risk of a recession in Australia.

View attachment 38608

The Reserve Bank of Australia has increased the cash rate 13 times over the past 19 months, which has led to increased interest rates. Image source: Shutterstock.

This comes in the wake of one of the most intense cycles of rate rises by the Reserve Bank of Australia (RBA).

Over the past 19 months, the RBA has rapidly increased the cash rate 13 times, catapulting interest rates from 0.10 per cent to a staggering 4.35 per cent.

The RBA's hand was forced due to soaring inflation, necessitating these rate hikes to keep prices in check.

However, this has resulted in increased costs for homeowners and businesses alike.

'Usually, whenever we get a very significant increase to interest rates, just like we've had right now, there is some sort of reckoning—a day of reckoning—or some sort of crisis that eventuates through that,' Ms Mousina warned during a recent AMP webinar.

Drawing parallels with the recent closure of banks in the US in March and historical data showing that tightening by the Federal Reserve often leads to crisis, predicting a potential economic downturn in 2024.

'I think that we will see some other sort of…whether it’s a mini-crisis or some sort of more significant economic downturn in 2024,' she said.

The looming economic headwinds suggest softer global growth or even a recession in the coming months.

Mousina hopes for a mild recession, given the positive savings buffers that consumers currently have, which could potentially shield them from a downturn.

'But it is still a risk for next year,' Ms Mousina added.

The current situation bears an uncanny resemblance to the recession of the early 1990s.

'The RBA kept increasing the cash rate—everything looked OK. The unemployment rate fell quite significantly, and then the unemployment rate started rising very, very quickly again as we went into that recession, and the RBA cut rates quickly,' she explained.

'Things can seem OK when they’re not, which is why financial markets are still pricing in a decent chance for a recession.'

Despite Australia's historically low unemployment rate, which stood at 3.8 per cent in November 2023, many Australians are grappling with the high cost of living due to inflation.

Inflation peaked at 7.8 per cent in December 2022, and the most recent figures still show a high rate of 5.4 per cent, according to the Australian Bureau of Statistics.

An inflation rate of between 2 and 3 per cent is the ideal measure for price growth, according to economists.

Key Takeaways

• AMP Deputy Chief Economist Diana Mousina has issued a warning about a potential economic crisis in Australia due to rising inflation and interest rates.
• The Reserve Bank of Australia's aggressive rate hikes, from 0.10 per cent to 4.35 per cent in 19 months, are seen as a significant factor contributing to the risk of recession.
• Historical data suggests a link between the rapid tightening of monetary policy by central banks and subsequent economic crises, with recent US bank closures cited as a possible early warning.
• Despite low unemployment rates, the high cost of living and persistent inflation are putting pressure on Australian consumers, with a potential mild recession forecasted for 2024.

What are your thoughts on the potential 'day of reckoning'? Share your thoughts with us in the comments below.

Another case of Labor bringing about the ' Recession we had to have" I think we've been here before

 

[BruceC]

A lot of changes have happened recently due to the ongoing cost of living crisis.

This 2024, Australia's economic landscape is set to face a significant shift, with a leading economist warning of a potential recession.

The cause? A rapid and brutal rise in interest rates.

This 'day of reckoning', as it's been ominously dubbed, could have far-reaching implications for Australians, affecting everything from home loans to business costs and the overall cost of living.

AMP's Deputy Chief Economist, Diana Mousina, has raised the alarm, stating that there's a 40 per cent risk of a recession in Australia.

View attachment 38608

The Reserve Bank of Australia has increased the cash rate 13 times over the past 19 months, which has led to increased interest rates. Image source: Shutterstock.

This comes in the wake of one of the most intense cycles of rate rises by the Reserve Bank of Australia (RBA).

Over the past 19 months, the RBA has rapidly increased the cash rate 13 times, catapulting interest rates from 0.10 per cent to a staggering 4.35 per cent.

The RBA's hand was forced due to soaring inflation, necessitating these rate hikes to keep prices in check.

However, this has resulted in increased costs for homeowners and businesses alike.

'Usually, whenever we get a very significant increase to interest rates, just like we've had right now, there is some sort of reckoning—a day of reckoning—or some sort of crisis that eventuates through that,' Ms Mousina warned during a recent AMP webinar.

Drawing parallels with the recent closure of banks in the US in March and historical data showing that tightening by the Federal Reserve often leads to crisis, predicting a potential economic downturn in 2024.

'I think that we will see some other sort of…whether it’s a mini-crisis or some sort of more significant economic downturn in 2024,' she said.

The looming economic headwinds suggest softer global growth or even a recession in the coming months.

Mousina hopes for a mild recession, given the positive savings buffers that consumers currently have, which could potentially shield them from a downturn.

'But it is still a risk for next year,' Ms Mousina added.

The current situation bears an uncanny resemblance to the recession of the early 1990s.

'The RBA kept increasing the cash rate—everything looked OK. The unemployment rate fell quite significantly, and then the unemployment rate started rising very, very quickly again as we went into that recession, and the RBA cut rates quickly,' she explained.

'Things can seem OK when they’re not, which is why financial markets are still pricing in a decent chance for a recession.'

Despite Australia's historically low unemployment rate, which stood at 3.8 per cent in November 2023, many Australians are grappling with the high cost of living due to inflation.

Inflation peaked at 7.8 per cent in December 2022, and the most recent figures still show a high rate of 5.4 per cent, according to the Australian Bureau of Statistics.

An inflation rate of between 2 and 3 per cent is the ideal measure for price growth, according to economists.

Key Takeaways

• AMP Deputy Chief Economist Diana Mousina has issued a warning about a potential economic crisis in Australia due to rising inflation and interest rates.
• The Reserve Bank of Australia's aggressive rate hikes, from 0.10 per cent to 4.35 per cent in 19 months, are seen as a significant factor contributing to the risk of recession.
• Historical data suggests a link between the rapid tightening of monetary policy by central banks and subsequent economic crises, with recent US bank closures cited as a possible early warning.
• Despite low unemployment rates, the high cost of living and persistent inflation are putting pressure on Australian consumers, with a potential mild recession forecasted for 2024.

What are your thoughts on the potential 'day of reckoning'? Share your thoughts with us in the comments below.

Why do you insist on reporting this doom and gloom stuff.
Other economists have differing opinions.

 

[Staffordshire Whippet]

Sounds almost as reliable as a B.O.M. Cyclone Jasper forecast.

 

[David567]

Personally I think the price hike with the power companies started most of the price gouging. Interest rates have been much in the old days than what it is now. As soon as the greedy power CEO's wanted higher Bonus's is when busniess had to increase the prices. As far as the banks are concerned, their profits have been the highest of all companies being around the $70 billion range. Remember the wholesale price on power is the lowest it has been in years so why put the price up, GREED is the answer. Land and house prices plus greedy landlords are having their share of extreme greed as well. Australia as the potential to be the best country in the world. We just need a government that isn't corrupt but I won't be holding my breath for that because voters are to stupid that see that Labor and liberal are not here to help. WE NEED A NEW GOVERNMENT. No other political party could do worse if they tried especiall Labor but clowns keep voting for them. Wake up Aussies, wake up.

 

[franzp]

While it seems that we are always being warned of doom and gloom with interest rates etc I can remember the days when we had a 13% interest rate on our home/ We had 4 children so it was wise to be careful. Fortunately we did not smoke and my husband only occasionally would have an alcoholic drink/ We lived within our means which is what the younger generation seem unable to do. We did not have holidays although the children went to camps run by youth groups but we did not.

Yes, we had higher interest rates, but houses didn't cost a million dollars, and rents didn't cost most of the average worker's wage. If we all earned politician's salaries, we wouldn't be worried about it either.

 

[weezza]

A lot of changes have happened recently due to the ongoing cost of living crisis.

This 2024, Australia's economic landscape is set to face a significant shift, with a leading economist warning of a potential recession.

The cause? A rapid and brutal rise in interest rates.

This 'day of reckoning', as it's been ominously dubbed, could have far-reaching implications for Australians, affecting everything from home loans to business costs and the overall cost of living.

AMP's Deputy Chief Economist, Diana Mousina, has raised the alarm, stating that there's a 40 per cent risk of a recession in Australia.

View attachment 38608

The Reserve Bank of Australia has increased the cash rate 13 times over the past 19 months, which has led to increased interest rates. Image source: Shutterstock.

This comes in the wake of one of the most intense cycles of rate rises by the Reserve Bank of Australia (RBA).

Over the past 19 months, the RBA has rapidly increased the cash rate 13 times, catapulting interest rates from 0.10 per cent to a staggering 4.35 per cent.

The RBA's hand was forced due to soaring inflation, necessitating these rate hikes to keep prices in check.

However, this has resulted in increased costs for homeowners and businesses alike.

'Usually, whenever we get a very significant increase to interest rates, just like we've had right now, there is some sort of reckoning—a day of reckoning—or some sort of crisis that eventuates through that,' Ms Mousina warned during a recent AMP webinar.

Drawing parallels with the recent closure of banks in the US in March and historical data showing that tightening by the Federal Reserve often leads to crisis, predicting a potential economic downturn in 2024.

'I think that we will see some other sort of…whether it’s a mini-crisis or some sort of more significant economic downturn in 2024,' she said.

The looming economic headwinds suggest softer global growth or even a recession in the coming months.

Mousina hopes for a mild recession, given the positive savings buffers that consumers currently have, which could potentially shield them from a downturn.

'But it is still a risk for next year,' Ms Mousina added.

The current situation bears an uncanny resemblance to the recession of the early 1990s.

'The RBA kept increasing the cash rate—everything looked OK. The unemployment rate fell quite significantly, and then the unemployment rate started rising very, very quickly again as we went into that recession, and the RBA cut rates quickly,' she explained.

'Things can seem OK when they’re not, which is why financial markets are still pricing in a decent chance for a recession.'

Despite Australia's historically low unemployment rate, which stood at 3.8 per cent in November 2023, many Australians are grappling with the high cost of living due to inflation.

Inflation peaked at 7.8 per cent in December 2022, and the most recent figures still show a high rate of 5.4 per cent, according to the Australian Bureau of Statistics.

An inflation rate of between 2 and 3 per cent is the ideal measure for price growth, according to economists.

Key Takeaways

• AMP Deputy Chief Economist Diana Mousina has issued a warning about a potential economic crisis in Australia due to rising inflation and interest rates.
• The Reserve Bank of Australia's aggressive rate hikes, from 0.10 per cent to 4.35 per cent in 19 months, are seen as a significant factor contributing to the risk of recession.
• Historical data suggests a link between the rapid tightening of monetary policy by central banks and subsequent economic crises, with recent US bank closures cited as a possible early warning.
• Despite low unemployment rates, the high cost of living and persistent inflation are putting pressure on Australian consumers, with a potential mild recession forecasted for 2024.

What are your thoughts on the potential 'day of reckoning'? Share your thoughts with us in the comments below.

We have been in a slow recession for years. The government is totally responsible for inflation, it doesn’t matter which party is in. They grossly over spend our money, and we have to pay the price. The economy is inconsistent with wages. So everything is out of sinc. They blame everything on overseas issues as they do not accept their own mistakes or accept responsibility.

 

[Macarj]

Like Paul Keating in 1991 maybe it's the recession we have to have

 

[Macarj]

While it seems that we are always being warned of doom and gloom with interest rates etc I can remember the days when we had a 13% interest rate on our home/ We had 4 children so it was wise to be careful. Fortunately we did not smoke and my husband only occasionally would have an alcoholic drink/ We lived within our means which is what the younger generation seem unable to do. We did not have holidays although the children went to camps run by youth groups but we did not.

Our rate went to 17% just after we built a bigger house but we got through it , No holidays no luxuries for 3 years

 

[Babbie]

Our rate went to 17% just after we built a bigger house but we got through it , No holidays no luxuries for 3 years

Well a lot of us that vintage remember high interest rates. Many people go without to get ahead, that is nothing new. Hopefully now things are easier for you and you can enjoy your retirement!

 

[Macarj]

Well a lot of us that vintage remember high interest rates. Many people go without to get ahead, that is nothing new. Hopefully now things are easier for you and you can enjoy your retirement!

YES

 

[Gsr]

Instead of putting up interest rates all the time the GST should be increased. That way everybody gets to contribute to bringing inflation down, not just people paying off homes or businesses with loans. Luxury items need to be taxed higher than everyday items that are necessities for most people.

 

[Shane/#]

A lot of changes have happened recently due to the ongoing cost of living crisis.

This 2024, Australia's economic landscape is set to face a significant shift, with a leading economist warning of a potential recession.

The cause? A rapid and brutal rise in interest rates.

This 'day of reckoning', as it's been ominously dubbed, could have far-reaching implications for Australians, affecting everything from home loans to business costs and the overall cost of living.

AMP's Deputy Chief Economist, Diana Mousina, has raised the alarm, stating that there's a 40 per cent risk of a recession in Australia.

View attachment 38608

The Reserve Bank of Australia has increased the cash rate 13 times over the past 19 months, which has led to increased interest rates. Image source: Shutterstock.

This comes in the wake of one of the most intense cycles of rate rises by the Reserve Bank of Australia (RBA).

Over the past 19 months, the RBA has rapidly increased the cash rate 13 times, catapulting interest rates from 0.10 per cent to a staggering 4.35 per cent.

The RBA's hand was forced due to soaring inflation, necessitating these rate hikes to keep prices in check.

However, this has resulted in increased costs for homeowners and businesses alike.

'Usually, whenever we get a very significant increase to interest rates, just like we've had right now, there is some sort of reckoning—a day of reckoning—or some sort of crisis that eventuates through that,' Ms Mousina warned during a recent AMP webinar.

Drawing parallels with the recent closure of banks in the US in March and historical data showing that tightening by the Federal Reserve often leads to crisis, predicting a potential economic downturn in 2024.

'I think that we will see some other sort of…whether it’s a mini-crisis or some sort of more significant economic downturn in 2024,' she said.

The looming economic headwinds suggest softer global growth or even a recession in the coming months.

Mousina hopes for a mild recession, given the positive savings buffers that consumers currently have, which could potentially shield them from a downturn.

'But it is still a risk for next year,' Ms Mousina added.

The current situation bears an uncanny resemblance to the recession of the early 1990s.

'The RBA kept increasing the cash rate—everything looked OK. The unemployment rate fell quite significantly, and then the unemployment rate started rising very, very quickly again as we went into that recession, and the RBA cut rates quickly,' she explained.

'Things can seem OK when they’re not, which is why financial markets are still pricing in a decent chance for a recession.'

Despite Australia's historically low unemployment rate, which stood at 3.8 per cent in November 2023, many Australians are grappling with the high cost of living due to inflation.

Inflation peaked at 7.8 per cent in December 2022, and the most recent figures still show a high rate of 5.4 per cent, according to the Australian Bureau of Statistics.

An inflation rate of between 2 and 3 per cent is the ideal measure for price growth, according to economists.

Key Takeaways

• AMP Deputy Chief Economist Diana Mousina has issued a warning about a potential economic crisis in Australia due to rising inflation and interest rates.
• The Reserve Bank of Australia's aggressive rate hikes, from 0.10 per cent to 4.35 per cent in 19 months, are seen as a significant factor contributing to the risk of recession.
• Historical data suggests a link between the rapid tightening of monetary policy by central banks and subsequent economic crises, with recent US bank closures cited as a possible early warning.
• Despite low unemployment rates, the high cost of living and persistent inflation are putting pressure on Australian consumers, with a potential mild recession forecasted for 2024.

What are your thoughts on the potential 'day of reckoning'? Share your thoughts with us in the comments below.

AMP Economicst wouldn't trust them AMP are in it for themselves GREED AND PROFIT parasites

 

[Babbie]

Instead of putting up interest rates all the time the GST should be increased. That way everybody gets to contribute to bringing inflation down, not just people paying off homes or businesses with loans. Luxury items need to be taxed higher than everyday items that are necessities for most people.

Agree!

 

[gordon1940]

While it seems that we are always being warned of doom and gloom with interest rates etc I can remember the days when we had a 13% interest rate on our home/ We had 4 children so it was wise to be careful. Fortunately we did not smoke and my husband only occasionally would have an alcoholic drink/ We lived within our means which is what the younger generation seem unable to do. We did not have holidays although the children went to camps run by youth groups but we did not.

If the desire is there you ca make it work.

 

[gordon1940]

AMP Economicst wouldn't trust them AMP are in it for themselves GREED AND PROFIT parasites

AMP , I believe, is a damaged brand due to past doubtful ( some proven) practises,