Rates signal as CBA cuts fixed rate

Commonwealth Bank latest fixed rate move suggest rates may be heading down, not up. Bond market rates which determine fixed rates, rather than official rates, are going down in Australia. That’s why Commonwealth Bank is offering to fix home loan rates at 6.95 per cent for three years when the bank’s standard variable rate is 7.07 per cent. For the investor, these pricing indicators can be a sign of the turning points in the interest rate cycle. Fixed rates reflect where financial market traders believe official rates may be heading over time.

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