Already a subscriber?One week does not make a trend in the volatile world of economics, but local and international events of the past few days give credence to the minority view that emerged at the start of this year that theCritics of the RBA who claimed the central bank made a mistake hiking interest rates in November are now looking a bit alarmist. We learned this week that the
Treasurer Jim Chalmers calls it the “trifecta”. “Unemployment has fallen, inflation is moderating and real wages are growing again,” he said this week. US economic growth and inflation were upgraded in the Fed’s forecasts this week. Fed policymakers dialled back rate cuts penciled in for next year and upped their long-term expected interest rate.
“An early interest rate cut is not on the cards and I don’t think anything happens on interest rates for quite a while,” Richardson says. National Australia Bank economists noted Bullock seemed “sensitive” to the labour market, after she said it was “firmly on the board’s radar and this is why we are being cautious”.
“Therefore, we jettison our two rate cuts for this year and expect only one 25 basis point cut in November, with risk that there are no rate cuts this year.”
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