Opinion
Why RBA rate cut could come from Jim Chalmers’ subsidies
There is a quirk in the measurement of underlying inflation in the December quarter that may put pressure on the RBA to cut interest rates early next year.
John KehoeEconomics editorThe Reserve Bank of Australia has been steadfast that it won’t be fooled by Treasurer Jim Chalmers’ subsidies for energy bills, rent and childcare which will temporarily reduce inflation.
Governor Michele Bullock has signalled the RBA won’t prematurely cut interest rates in response to subsidies artificially lowering prices because when the subsidies expire inflation will shoot up again.
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