The RBA minutes illuminate all of the points of Alboflation observed by MB:
“In turning to the policy decision, members noted that inflation in Australia remained very high, despite a decline in prior months, and was currently not expected to return to the top of the target range until mid-2025”.
“Services price inflation, in particular, continued to be high. There was little spare capacity in the economy or the labour market, and the level of economic activity was high relative to some years prior”.
“Further, the housing market had stabilised, with housing prices rising once again. At the same time, output growth had slowed materially. Consumer spending had been weak in the first half of 2023 because of the effect of higher inflation, increased tax payments and higher interest rates on households’ real disposable incomes”.
“The tightening of monetary policy was still working its way through the economy, including as fixed-rate loans matured”.
“Core inflation had proved stickier than anticipated in many advanced economies and several central banks had tightened policy unexpectedly or by more than expected in preceding months. Market expectations for the peak in policy rates in most advanced economies had also continued to rise”.
“The case to increase the cash rate further was centred on the observations that inflation was forecast to remain above target for an extended period and there was a risk that this timeframe would be extended without further monetary policy tightening”.
“Members noted that several CPI categories for which inflation was typically quite persistent already had too high inflation, including rent and services prices more broadly. They also observed that weak productivity was contributing to strong growth in unit labour costs”.
“Furthermore, electricity prices had risen substantially on 1 July; while this was expected and had been incorporated in the staff forecasts for some time, there was a risk that the wider effects on inflation had not been fully captured”.
“…Members agreed that some further tightening of monetary policy may be required to bring inflation back to target within a reasonable timeframe, but that this depended on how the economy and inflation evolve”.
“At the August meeting, the Board would have the benefit of additional data on inflation, the global economy, the labour market and household spending, as well as an updated set of staff forecasts and a revised assessment of the risks”.
“Members reaffirmed their determination to return inflation to target within a reasonable timeframe and their willingness to do what is necessary to achieve that outcome”.
In short, Albo’s maniac mass immigration is driving rental inflation and over-consumption via rising house prices, and his total failure to curtail energy cartels has delivered bill shocks. Both are contributing to robust and sticky services inflation.
Global inflation has turned into a bust via deflating goods. Australia’s inflation problem is today homegrown in Canberra by the inept Albanese Government.
