We discuss the latest from the RBA, via the new press conference and the Statement On Monetary Policy.
In short, the RBA Governor Michele Bullock says she is yet to be convinced inflation is on a sustainable path back to target and further interest rate rises could not be ruled out as the bank seeks to curb price rises stoking the nation’s cost-of-living crisis.
“Domestically, there are uncertainties regarding the lags in the effect of monetary policy and how firms’ pricing decisions and wages will respond to the slower growth in the economy at a time of excess demand, and while the labour market remains tight,” the board statement said.
This translates into higher rates for longer, which was not what the market wanted to hear!
Do not expect a rate cut soon. Plan accordingly.
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