Australian interest rates

Roy Morgan has released its inflation expectations survey for April, which shows that expectations fell 0.5% to 5.5% after fuel excise was cut by 22.5 cents in the March federal budget: In April 2022 Australians expected inflation of 5.5% annually over the next two years, down 0.3% points from March 2022.

Labor leader Anthony Albanese continues to attract scrutiny over his push for the minimum wage to be increased in line with the inflation rate. The Institute of Public Affairs (IPA) estimates that a 5.1% increase in the minimum wage would add about 2.25% to the inflation rate over the next 12 months.

If you want to understand just how biased the Australian MSM is these days then look no further than the last week of political coverage.

Freelance journalist Tarric Brooker has authored an interesting article estimating how forecast interest rate rate rises would compare with Australia’s historical experience.

Deutsche with some alternative methods for measuring US financial conditions.

By Gareth Aird, head of Australian economics at CBA: Key Points: Next week the ABS will publish the Q1 22 Wage Price Index (WPI) and the April labour force survey.

ZH reporting on a chat with Fed chair Jay Powell this morning.

The biased corporate press has a new panic to attempt to sway a losing election hand: Businesses are reporting a surge in the cost of workers just as Labor leader Anthony Albanese backs a 5 per cent wage increase to match the high inflation rate.

The futures market has truly lost its marbles, ratchetting up its Australian interest expectations even higher.

Chris Joye at Coolabah has an excellent house price forecasting record and he is BEARISH: The RBA has a long history of getting the Aussie housing market’s reactions to its cash rate changes horribly wrong, which is surprising given how easy the housing cycle is to forecast.

The relentless rise in Australian yields, to levels far beyond anything that the economy will be able to take, is now posing an interesting question.

Macquarie’s Viktor Schvets is ahead of the pack as usual: “My view for some time was that as we go through 2023 and 2024, there is a much higher probability of loosening of both fiscal and monetary policies than tightening,” he told the Macquarie Australia Conference on Wednesday.

Well done to the RBA.

Fresh from the RBA: At its meeting today, the Board decided to increase the cash rate target by 25 basis points to 35 basis points.

Aussie consumer confidence has bombed ahead of today’s rates decision by the RBA, according to the ANZ/Roy Morgan Research consumer confidence index.

There is one reason why the RBA should hike rates today and it has nothing to do with economics and everything to do with politics.

A nice pice today from economics greybeard Ross Gittins: I can’t remember a time when the arguments of all those bank and business economists claiming “the inflation genie is well and truly out of the bottle” and demanding the Reserve Bank raise interest rates immediately and repeatedly have been so unconvincing.

Mwahaha.

Gareth Aird, head of Australian economics at CBA, thinks the RBA will wait until June: Key Points: The upcoming RBA May Board meeting is ‘live’.

As reported earlier, Australia’s Consumer Price Index (CPI) came in white hot at 2.1% in the March quarter – smashing market expectations of a 1.7% rise: Annual CPI soared by 5.1%, beating expectations of a 4.6% rise: It was the largest quarterly and annual rise in CPI since the GST was introduced in 2000.