The Reserve Bank left its cash rate at 4.35% on Tuesday in a widely anticipated decision, marking more than a year at that level. The rate-setting board said “some of the upside risks to inflation appear to have eased” and scrapped a longstanding line that it wasn’t ruling anything in or out on policy.
Australia’s central bank said it’s “gaining some confidence” that inflation is moving sustainably toward target, prompting traders to boost bets on interest-rate cuts starting as early as February.
That said, with the CPI up 16% over 3-years and the real costs much higher to households, this will be seen as a further dampener on household spending and confidence. Other reports recently have been highlighting the pressures on households as I discussed yesterday.
Asked what she had made of the new arrangements in her first full year of press conferences, the governor said it’s been “a bit of a wild ride for me.” Households could rightly say the same!
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