Criticism of the RBA is usually implicit. Westpac is clear about it.
Normally, monetary policy decisions should not come down to a single number tipping the balance. Monetary policy affects the economy with a lag and thus needs to be forward-looking. This time around, though, as in several recent quarters, the latest read for underlying inflation has been material for the RBA MPB’s upcoming decision.
…Quarterly reads in the ‘sixes and sevens’ puts underlying inflation squarely inside the RBA’s 2–3%yr target range and is consistent with monetary policy no longer needing to be restrictive. We therefore believe that the MPB now has the confirmation it needs to continue on its ‘cautious’ – if not so predictable last month – path of removing current monetary restrictiveness.
