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There’s no reason to stop it. Inflation is tumbling. Inflation expectations re-anchored. Wage growth is smashed.
The recent consumer bounce is fragile and related to lifting expectations of easing.
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It is also still meaningfully below the RBA forecast. Goldman has more.
We also upgrade our tracking estimate for GDP growth in 4Q2024 by 10bps to 0.5%qoq, corresponding to a year-ended rate of 1.2%yoy. We note this remains somewhat below the RBA’s standing forecast (Nov SMP: 1.5%yoy).
You don’t fatten the pig on market day, and if the RBA does not cut now, it will overshoot its target.
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It probably already has.
About the author
David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific's leading geo-politics and economics portal.
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.