The economy is still weak and rates cuts are still expected this year but thankfully outside the election cycle.
The next move in Australian interest rates will likely come with any continued softness in the labour market.
While some in the market expected it to cut rates, Westpac economist Bill Evans said the case was yet to be made. He still expects two rate cuts this year but obviously at another time.
The next trigger point comes with next week’s labour market figures and any softness will spark further calls for a rate cut.
In its statement today, the RBA made clear it is looking for more wages growth which will come from a tightening in the labour market which explains the importance of next Thursday’s Labour market data.
Last month’s inflation numbers sparked calls for a rate cut.
On Friday, when the Statement of Monetary Policy is released, the bank is expected to cut its estimates for the economy which are way out of kilter with reality.
The RBA is at 2.75 per cent for GDP this year as against two per cent from NAB’s Alan Oster and two per cent for inflation against 1.5 per cent at year end.
Industry captains pool their resources
Concerns over softening private capital expenditure and growing red tape have brought 23 peak industry bodies together to plan a co-ordinated response on productivity.
Our politicians don’t have a monopoly on nation building
This low-profile, but ambitious, project has the potential to transform the economy. And there’s not a politician in sight.
Prime Minister Scott Morrison dodged a bullet today when the RBA left interest rates on hold at 1.5 per cent because a cut in rates would have damaged his reputation as an economic manager.