RBA hikes 50 basis points
No messing around from the RBA, hiking the cash rate target as expected by 50 basis points to 2.35 per cent.
The pace of the tightening to date has been...rapid!
I guess just about everything that can or need to be said about this has already been said.
With the bulk of Australia's inflation pressures imported, and plenty of leading indicators already cooling, hopefully there will be a pause soon, or at least a slowing in the pace of hikes.
Much of the inflation to date in Australia has been driven by the price of goods, reflecting fuel and materials prices, and supply chain/weather disruptions.
There has, however, been little in the way of wages growth; the annual change in the wage price index only rose to a meagre 2.6 per cent growth in the June quarter.
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The June quarter national accounts are due out today and will shed some further light.
Hours worked jumped 4.6 per cent in the June quarter on the Omicron rebound, and there should be some more useful information released on trends in labour costs.
The partials to date have been relatively soft, including a downward revision to net exports, soft public demand, and a drag from inventories, so the year-on-year growth might not be as strong as previously thought.
Consumption should still be strong over the 3 months to June, though.
