My view is the RBA is being ridiculous by refusing to cut interest rates as inflation disappears and reckon it will cut in February, but there is a silver lining to the delays.
Expectations are firming that interest rate cuts will come too late to restore the Albanese government’s standing with voters before the election, as Reserve Bank governor Michele Bullock warned the ongoing strength of the economy is fuelling inflation.
NAB broke with the rest of the big four banks on Thursday, pushing back its forecast for the RBA’s first rate cut to May from February, citing upside risks to inflation and the still strong jobs market. CBA, ANZ and Westpac still expect the RBA to cut the cash rate from 4.35 per cent to 4.1 per cent in February.
RBC Capital Markets also shifted its rate cut call to the RBA’s May 20 meeting after the Australian Bureau of Statistics (ABS) said the unemployment rate held steady at 4.1 per cent for a third straight month in October.
Anything that decreases the chance of Albanese government re-election is a plus for the nation.
Its corporate-grovelling plus tax and spend economy is a disaster for living standards.
Another plus could have been that RBA bullhawks are pressuring the government to address gas cartel inflation at the source instead of via rebates.
But that isn’t the case because the MSM is far too stupid to make the connection. All it is debating is government spending. There is no pressure.
If Michele Bullhawk does trigger a change in government, the ironies are everywhere.
She was appointed to reform the RBA because it had proven destructively hawkish in the last cycle. Whoops!
Moreover, Peter Dutton’s jaunts on Gina’s jumbo suggest he will gift the gas cartel everything it wants.
This means he’ll have to keep the energy rebates that have opened the gap between trimmed mean and headline inflation that is angering the RBA.
The more things change, the more they stay the same.
