Via Terry Mccrann, RBA fogorn:
First the big points. The overall inflation numbers were low and unsurprising. They didn’t “demand” another interest rate cut from the Reserve Bank and the RBA will duly leave its rate unchanged at Tuesday’s meeting.
We’ve had two cuts in successive months and the banks have passed on most of the 50-point total. A third cut in a third successive month would “ring alarm bells”. It would also do bugger all — except trigger a bank brawl.
…We will have to see what happens in this current quarter. Even more importantly the RBA will as well — the numbers demand waiting and watching rather than any further action. Especially given what’s — uncertainly — developing globally.
…“Everyone” and especially the RBA will want to see what the next wages numbers show and even more the next jobs and jobless numbers in three weeks.
Why? We know they’ll be weak. But I agree. The RBA won’t cut next week.
It will again shortly as construction collapses.
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.
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