Chris Joye with the note. I agree:
If the RBA’s powerful board was considering the possibility of pre-emptively tapering its monetary policy stimulus years before it had secured its goal of getting annual wages growth well above 3 per cent and, even more importantly, core inflation “sustainably” within its target 2 to 3 per cent band, the recent economic data has not provided a compelling case.
This week the all-important wage price index lent weight to the RBA’s hypothesis that nation-wide pay pressures remain extremely soft (despite the hyperbole on inflation), perhaps because employers remain scarred by the many savage shocks since, and including, the global financial crisis, which have made them resistant to boosting their fixed operating costs.
