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Awaiting the RBA announcement on the 18/02/2025, I have sold my Australian share positions in preparation for a decrease in the cash rate in speculation of external pressures on the RBA and in consideration of dangerously slow economic growth, strong employment growth (despite a high-vacancy rate in the job market) and that CPI inflation is at 2.4%- sitting comfortably within the target rate while also being unaffected by December shopping; indicating that consumers are suffering the inflationary costs and nudging accordingly. The Inflation target rate is between 2-3%, and is a 0.1% decrease since December.

If the cash rate was to decrease, it is likely that inflation will bounce, or that a recession will be declared, dropping share prices. If the rates are unchanged, it will make the ASX more volatile, and will suffer an even larger unpredictable drop. I have personally found the ASX market to be too volatile and small to accurately invest in.

Australia has been heavily relying on migrants to further distort the hyper-inflated economy, as a key metric for measuring inflation and recessions (employment) is inaccurate- but is being used to justify a rate cut. With lackluster incentives for Australians to purchase property and a declining quality-of-life coupled with rising racial conflicts, it is likely that Australian's will opt out similar to the US job market where Australian's are migrating overseas for a better quality of life, or simply reducing their employment hours and relying on government benefits. Roughly 30% of the "prime-aged" male workers aged between a stagnant data range of 25-55 in the US have left the labour force since 1980, relying entirely on government benefits- only a few of these men are retired (Nicholas Eberstadt Men Without Work 2022).

This places heavy responsibilities on migrants to replace the Australians (who are proportionately offloading Australian revenue overseas or investing into Australian investment properties, creating further stressors as the working class has to offset the inflation) which is unlikely to happen. With overseas migration being 446,000 (ABS), the government has created a dependency on migrants to offset inflationary woes, which is further damaging the economy.

Politics are also at play with the market, as Donald Trump's presidency will promote blind confidence within the ASX, and nearing the next Australian Federal Election-it is likely that the ALP will prop up the market until it can be dumped upon the LPA as a method of securing the following Federal Election.

I have sold my entire shares in NDQ BETASHARES NASDAQ 100 ETF, IOZ ISHARES CORE S&P/ASX 200 ETF, and SYI HIGH DIVIDEND YIELD FUND and am planning to restructure my Australian share allocations. NDQ has served me particularly well and has promised consistent growth, but the volatility of the current market has made the investments too risky. 

There are a few promising ASX shares I will be investing in after the rate decision, but I will be shifting the majority of my shares into the US market.