RBA may be forced to take a stronger stand
Other central banks have been more than willing to engineer economic downturns in order to rid their economies of the scourge of inflation.
Other central banks have been more than willing to engineer economic downturns in order to rid their economies of the scourge of inflation.
The fog blanketing Australia’s economic outlook has thickened, leaving the country’s central bank in a quandary about which direction to next take interest rates.
The RBA’s caution about moving the policy needle too close to neutral continues to pay big dividends, with the US interest rate outlook now flipped entirely from where it started the year.
If inflation continues to be stubbornly elevated, a discussion about rate cuts could be delayed into 2025.
While frustrating to economists and reporters alike, the RBA governor’s staid approach has just paid off.
This week’s RBA board meeting is the first fully staffed gathering since September, when former governor Philip Lowe ended his seven-year run.
The Reserve Bank of New Zealand could upset the consensus that interest-rate cycles have peaked globally and cuts aren’t far away.
The central bank won’t wait until inflation is back in the target band before it starts to cut interest rates, according to board member Ian Harper.
There are signs of weakness emerging in the Australian economy.
Financial markets should be waking to the realisation that the RBA has ushered in a new era of hawkishness and potential rate hikes next year.
Original URL: https://www.theaustralian.com.au/author/james-glynn/page/3