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Weekly Economic Commentary

Weekly Economic Commentary

Categories: General, General

The RBA has retained a tentative but “glass half full” view on financial conditions and the economy. It’s not surprising that the RBA continues to indicate that the next move in rates is more likely to be up than down even though there is no strong case for an adjustment to monetary policy any time soon.

If the RBA’s central case for economic growth and inflation is correct, the first RBA tightening is unlikely to be until around mid-2019. However, with the prospect of more out of cycle rate rises and banks doing the work for the RBA, we could see the RBA stepping back from its tightening bias to a more neutral rates bias in the near term and deferring the first rate hike even further.

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Source: Rural Bank

 

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