The RBA will decide whether to hike or hold rates next Tuesday. The bank's new deputy governor has offered us some clues to which way they might go.
The inflation figure due to be released to is different than most. It's focusing the minds of politicians as well as economists.
But I think there's a good chance the Reserve Bank won't push up rates, even if the inflation number is high, for a number of reasons.Ahead of its meeting next week, the RBA has effectively talked itself into a corner: should it come good on its threats of a rate hike if inflation comes in hotter than expected, or will it choose to maintain its apparent reluctance to push rates even higher?has been forecasting inflation of 3.8 per cent in the year to June. Inflation shot down to 3.
It might be that high rates were taking "a little bit longer" to crimp inflation in the prices of services than goods. If so, the right response would be to "hold your nerve" and note that services inflation has been coming down but in a "slightly bumpy way".The other point Hauser was especially keen to make is that the prices of many services are "administered" — that is, set by the government or a tribunal.
And Hauser made another point he thought was exceptionally important to him, as a new arrival from the United Kingdom: Australia When it makes its decision next Tuesday, the Reserve Bank will be concerned not so much with where inflation has been , but where it is going — which is probably down.
Rba Interest Rates Inflation Andrew Hauser Mortgage Repayments Recession Inflation Target Peter Martin Interest Rate Decision
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