Interest rates are a topical issue. Whilst their future direction is almost impossible to predict it is valuable to consider the mechanics of how they work and what affect they may have on cash flow.
We are currently in an environment of relatively low interest rates when compared to long term historical trends. Similarly the economy, employment levels, inflation, and many other economic indicators are at historically favourable levels.
With this in mind, the Reserve Bank of Australia (RBA) will use “monetary policy” as an instrument to attempt to maintain