Bank of America flags interest-rate level that could erode Australian retirees' savings

Bank of America’s interest-rate strategist Mark Cabana warned that while U.S. rates have not yet curbed economic growth, they are edging toward a level that could become financially hazardous. He noted the Federal Reserve’s recent quarter-point hike to a 3.75%-4% range and projected a possible December move to 4%-4.25%, with higher levels in the high-4% to mid-5% range potentially tightening conditions worldwide. Cabana linked this outlook to Australia’s rising 10-year bond yield—the highest since 2011—and a softening housing market, which together threaten the value of workers’ superannuation.

During a visit to Sydney, he urged Australian super funds to monitor macro data closely. Other analysts, such as VanEck’s Anna Wu, argued that AI-driven investment growth might offset short-term market volatility, while RBA Governor Michele Bullock warned that a severe slowdown could be needed to curb inflation expectations.