The RBA's SoMP is dreamin'

From Bloxo at HSBC:

Amongst the many details in today’s RBA official statement we saw two key elements: downward revisions to the unemployment rate forecasts and upward revisions to the underlying inflation forecasts. Together, these revisions suggest to us that the RBA is unlikely to cut rates further. The RBA’s new forecasts suggest that it expects that the unemployment rate may already be past its peak (they previously expected it to rise until mid-2016). Importantly, the RBA typically does not cut further once this has happened. They also nudged their inflation forecasts higher, with underlying inflation now expected to be 2-3% over the year to Q4 2016 (previously 1.75-2.75%) and thus on target. We see the RBA on hold in coming quarters.

TD Securities’ Annette Beacher:

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About the author

David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal. He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.

The RBA’s SoMP is dreamin’