Rates on hold
OK, after today, monetary policy - alongside the wretched daily house price index - is going into the sin-bin of exhausting/exhausted subjects I'm not mentioning for a while.
Interest rates were on hold today at 0.75 per cent, as financial markets had anticipated.
There was an ongoing easing bias, with the Board prepared to ease further if needed:
Source: Reserve Bank of Australia
Unemployment is expected to stay where it is 'for some time', before supposedly at last getting below 5 per cent some time in 2021.
And inflation is expected to be 'close to' 2 per cent in 2020 and 2021.
The problem is, financial markets simply don't believe it, and implied expectations don't see any return to the target band for years and years to come.
RIP inflation target.
The problem is, financial markets simply don't believe it, and implied expectations don't see any return to the target band for years and years to come.
RIP inflation target.
The economist view on my Twitter feed makes for sombre reading.
Wages growth probably needs to get back to 3½ per cent to see inflation back in the middle of the target band, which isn't going to happen without a tighter labour market.
The Reserve Bank raised another source of uncertainty in today's Minutes, being the (perhaps euphemistically phrased) 'evolution of the housing construction cycle', which you can interpret as you will.
SOMP is due out at the end of the week.
SOMP is due out at the end of the week.
