Reporter's view: Deja vu at the RBA
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Reporter’s view: Economics correspondent Jennifer Duke writes: "It’s deja vu over at the RBA. The rate decision itself is no surprise to economists or markets today with little data since the central bank last met in February to justify a change in position.
"In fact, the wording is incredibly similar in the statement today compared to last month's statement.
”The RBA might not be ruling anything out, but almost everyone else thinks rate rises are over. What’s less clear is how long it’ll be until there’s a cut. A recent Finder survey found about a quarter of its panel don’t think the RBA will cut rates until 2025, but about 40% expect to see the cycle start to ease in September. Just one-in-10 thought there might be a rate cut in May when the RBA next meets.
"RBA governor Michele Bullock has been firm that the central bank will remain 'data dependent' and today was no different. She’ll no doubt re-iterate this message in her press conference this afternoon.
"While this will ensure markets and RBA watchers have some indication of what it will take for rates to be eased, it will make each new CPI figure take on increasing importance in the months ahead. And as we’ve seen from the US already this year, this final mile in the inflation fight can be volatile."
RBA leaves interest rates unchanged at 4.35%
The news: The Reserve Bank of Australia (RBA) kept the official cash rate on hold at its meeting today as it continues its wait and see approach on inflation. This was in line with the expectations of the majority of the economists.
The numbers: The interest rate has been kept on hold at 4.35%. This was the second meeting for 2024 and there has been no change to rates now since November 2023.
The RBA’s central forecast is currently that inflation will return to the 2% to 3% target range next year and will reach the midpoint of the band in 2026.
The context: Later this week, the ABS will publish unemployment figures that will give a clearer view of how interest rates are hitting the jobs market but most economists think we are at the peak of rates.
The board meets next in May and will publish new economic forecasts, a week ahead of the Federal Budget.
Later this week, the ABS will publish unemployment figures that will give a clearer view of how interest rates are hitting the jobs market.
What they said: “While recent data indicate that inflation is easing, it remains high. The board expects that it will be some time yet before inflation is sustainably in the target range,” the RBA board said in its post-meeting statement.
The source: Reserve Bank of Australia
