This Month
- Opinion
- Interest rates
The markets have got it wrong (again) on rate cuts
Bond traders are fully priced for some relief by April 2025 thanks to a couple of surprising data points. But it’s always the coldest just before sunrise.
November
- Opinion
- Australian economy
Risk of a rate rise is passing, but cuts are not on the agenda
The RBA has an important job this week in communicating how inflation is behaving behind the distortions caused by government subsidies.
September
- Opinion
- Monetary policy
Suddenly the RBA seems very isolated
Australia’s central bank looks neither hawk nor dove on monetary policy. It seems more of a shag on a rock in a sea of interest rate cuts.
August
- Opinion
- Interest rates
No smoking gun to lift rates, but RBA should still pull trigger
The underlying dynamics of the Australian economy are very different to the US. The cash rate is still too low to ensure inflation sustainably returns to target.
June
- Opinion
- Interest rates
Jobs boom means rate rise will be close call
It is becoming increasingly clear that a critical reason the economy is proving resilient to tighter monetary policy is a chronic shortage of labour.
May
- Opinion
- Federal budget
This budget won’t be a catalyst for rate cuts
When setting monetary policy, the RBA will look through temporary factors impacting prices to understand the underlying trend for inflation within the economy.
- Opinion
- Monetary policy
A rate rise was closer than you think
RBA insiders may be making the case for higher rates, as Michele Bullock walks the line between public opinion and the bank’s credibility.
November 2023
- Opinion
- Bonds
The RBA’s credibility is at stake if it does not raise rates
The policy decision is clear-cut. Not only should the central bank lift rates on Tuesday, but it also needs to signal that an increase in December is likely.
October 2023
- Opinion
- Interest rates
Lifting rates immediately would stamp Bullock’s inflation fighting credentials
At the very least the new governor’s first statement must recommit the board to doing whatever it takes to get inflation down by 2025.
September 2023
- Opinion
- Monetary policy
Why Michele Bullock’s honeymoon may not last long
The recent run of data showing building inflationary pressures suggest that a rate hike is just around the corner.
July 2023
- Opinion
- Interest rates
Lowe should give Bullock a breather
If the RBA board believes that the cash rate is likely to rise further over the next six months, the imperative should be to get it done before the new governor chairs her first meeting in October.
- Opinion
- Monetary policy
Lowe had to go, but hard-headed Bullock may have to trigger recession
The new governor will be a “dovish hawk”. Not hiking unnecessarily but committed to bringing down inflation even if that means a short downturn.
- Opinion
- Monetary policy
The RBA now has good cause to pause
Australia’s central bank must neither overtighten nor let inflation quickly take off again. But historic labour demand is making the calls difficult.
June 2023
- Opinion
- Monetary policy
The RBA still has work to do if it is to contain inflation
Rate rises were supposed to start biting this year. But it looks like the Reserve Bank may have to push the cash rate past 4 per cent to slow the economy.
April 2023
- Opinion
- Interest rates
RBA can’t afford to pause on another interest rate hike
Australia’s cash rate might be a whopping 3.5 percentage points higher than a year ago, but the real short-term interest rate is mired near historic lows.
February 2023
- Opinion
- Interest rates
Reserve Bank has not misled, everyone has just misread
Phil Lowe has been very clear that rates are going higher. The real problem has been a widespread economic narrative about a miracle way to bring down inflation.
- Updated
- Opinion
- Interest rates
RBA must get on with lifting interest rates
CPI numbers have confirmed that we are getting just as much inflation as other similar economies, if not a bit more.
November 2022
- Opinion
- Inflation
Inflation fight needs fiscal policy
It would be easier to believe in the RBA’s hopes for a soft landing if governments were stepping up to correct their overspending.
July 2022
- Opinion
- Monetary policy
Time for RBA to slow down to execute a soft landing
The central bank has moved quickly to normalise monetary policy. But the pace needs to slow to avoid a problematic downturn.
April 2022
- Opinion
- Monetary policy
RBA must reset inflationary thinking
There is a good chance the Reserve Bank board will raise rates by 15 basis points on Tuesday. It should follow up with a hike of 25 basis points in June, taking the cash rate to 0.5 per cent within six weeks.
