We can’t both be right. The RBA’s monthly statement yesterday was bizarrely bullish. Via Bill Evans:
The themes that have become familiar in previous statements were repeated in this one: continuing global expansion; China slowing a little; international trade uncertainty; positive business conditions; household consumption a source of uncertainty; labour market outlook positive; wages growth low; but a gradual lift in wages growth expected; further gradual decline in the unemployment rate expected; inflation higher in 2019 and 2020; housing conditions in Sydney and Melbourne continue to ease; progress toward full employment and target inflation will be gradual.
However, the growth and unemployment forecasts have been revised. These forecasts will be confirmed in the Statement on Monetary Policy that will be released on November 9. The forecast growth rates for 2018 and 2019 have been revised up from 3 ¼ per cent to 3 ½ per cent, while the 2020 forecast is for a slowdown, although the current forecast of 3 per cent may now be revised up to 3 ¼ per cent. With no real change in the wording, there is no clear justification for this upward revision, particularly for the faster expected growth in 2019.
