Another one bites the dust:
Macquarie’s economics team of Justin Fabo and Ric Deverell say they now expect the RBA to remain on hold until early 2019.
While the economy is improving, the unemployment rate remains too high, and wages and price inflation too low for the 25 basis points of rate hikes pencilled in for August and November this year, the economists said.
“Monetary policy should be set on the path of least regret. That path, in our view, is now to err on the side of supporting growth for longer to gain more confidence that inflation will once again spend more time in the 2 per cent to 3 per cent target than not.”
The next move is down as the terms of trade falls resume, house price falls continue, residential construction keeps falling and the Botox Boom tops out.
