In the Australian Financial Review overnight: OECD tells RBA raise interest rates to cool house prices. (May be gated)

In brief:

  • The OECD advises the RBA should raise interest rates in the first half of next year to prevent housing prices rising to risky levels and “unwinding sharply”
  • OECD forecasts the Australian economy to expand at a below average 2.5% in 2015
  • Then recovering in 2016 as consumption and exports pick up
  • Recommends the Reserve Bank begin lifting interest rates from the second quarter of 2015, saying that persistent low rates are causing a “search for return” among property investors

I thought OECD stands for “Organisation for Economic Cooperation and Development”?

Apparently not. OECD = “Clueless”.

There, that’s more like it.

The RBA is likely to introduce some sort of macroprudential tool or tools to impact on investor demand for housing and finance. The RBA won;t be raising rates to deal with the issue. Not for a very long time, at least.