RBA

Shadow treasurer Jim Chalmers has flagged the 2-3 per cent inflation target will be reviewed for the first time in 30 years as part of a deep dive into the ...

“I’ve worked closely now with two of them, Glenn Stevens and Philip Lowe, and I have a mountain of respect for Philip Lowe.” “The real issue for central banks globally is what are the implications of the massive expansions of their balance sheets – what were the benefits and what are the ongoing costs of maintaining such a bloated balance sheet?” “Before we saw this inflation shock I was of the view the inflation target was too high, but clearly now the risk is a long period of high inflation,” Mr Evans said.

The Reserve Bank of Australia has indicated it will be assessing inflation and wage figures in coming months...

The Reserve Bank has released a major decision on the cash rate - but economists and investors are set to leapt on clues in Philip Lowe's statement.

“Borrowers who’ve had a change in circumstance could also struggle to make higher mortgage payments. CBA is tipping a hike to 0.25 per cent in June, and for the cash rate to be at 1.25 per cent by next February. Last month Dr Lowe conceded the evolving situation in Eastern Europe – and associated commodity price surge and supply shocks – had the potential to force the RBA’s hand by the end of the year, but again said there was a risk in moving too early. “The main sources of uncertainty relate to the speed of resolution of the various supply-side issues, developments in global energy markets and the evolution of overall labour costs,” Dr Lowe said. Dr Lowe on Tuesday said higher prices for petrol and other commodities will result in a further lift in inflation over coming quarters, with an updated set of forecasts to be published in May. Despite raging inflation, Dr Lowe has insisted again and again Australia has “time on its side” to boost wages and employment by an appropriate amount before an interest rate hike is needed.

The Reserve Bank of Australia has made its interest rate decision for this month as speculation around a potential rate rise builds. This month, the RBA has ...

Inflation has picked up and a further increase is expected, but growth in labour costs has been below rates that are likely to be consistent with inflation being sustainably at target." "Inflation has increased in Australia, but it remains lower than in many other countries; in underlying terms, inflation is 2.6 per cent and in headline terms it is 3.5 per cent. "The board has wanted to see actual evidence that inflation is sustainably within the 2 to 3 per cent target range before it increases interest rates.

At its meeting today, the Board decided to maintain the cash rate target at 10 basis points and the interest rate on Exchange Settlement balances at zero ...

Given the tightness of the labour market, a further pick-up in aggregate wages growth and broader measures of labour costs is in prospect. Higher prices for petrol and other commodities will result in a further lift in inflation over coming quarters, with an updated set of forecasts to be published in May. The main sources of uncertainty relate to the speed of resolution of the various supply-side issues, developments in global energy markets and the evolution of overall labour costs. The Board's policies during the pandemic have supported progress towards the objectives of full employment and inflation consistent with the target. The RBA's central forecast is for the unemployment rate to fall to below 4 per cent this year and to remain below 4 per cent next year. The strength of the Australian economy is evident in the labour market, with the unemployment rate falling further to 4 per cent in February. Underemployment is also at its lowest level in many years. In response, bond yields have risen and expectations of future policy interest rates have increased.

The Reserve Bank of Australia may have kept the cash rate steady at 0.1 per cent but borrowers and economists have been warned a hike could happen as soon ...

The Reserve Bank of Australia has indicated it will be assessing inflation and wage figures in coming months before raising interest rates.

"Higher prices for petrol and other commodities will result in a further lift in inflation over coming quarters, with an updated set of forecasts to be published in May," Dr Lowe said. "Over coming months, important additional evidence will be available to the board on both inflation and the evolution of labour costs," Dr Lowe said in a post-meeting statement. RBA governor Philip Lowe said inflation has picked up and a further increase is expected, but growth in labour costs has been below rates that are likely to be consistent with inflation being sustainably at the two to three per cent target.

The Reserve Bank of Australia has indicated it will be assessing inflation and wage figures in coming months...

The Australian dollar jumped after the Reserve Bank of Australia dropped its “patient” pledge, opening the door to the first interest rate increase in more ...

The Australian Financial Review’s survey of 36 economists suggests inflation will speed up to 3.7 per cent by mid-year. The central bank said it was prepared to follow up with super-sized increases. Bond investors have been wagering for months that the RBA would raise interest rates far earlier than its central scenario. “The board will assess this and other incoming information as it sets policy to support full employment in Australia and inflation outcomes consistent with the target.” It believes wage growth needs to be above 3 per cent to achieve this. They are priced for nearly eight increases this year, from at least six before the policy decision, taking the cash rate to an implied 1.9 per cent by December.

A reasonable wage price index on May 18 and decent average earnings in the national accounts on June 1 will be sufficient for governor Philip Lowe to pull the ...

The RBA will probably start gently with a 0.15 of a percentage point increase to 0.25 per cent. Usually, the national accounts fall the day after the RBA’s June board meeting. The April 27 inflation figure will be between 4 per cent and 5 per cent in the March quarter.

The fall in petrol prices appears to have tamed concerns over the inflation outlook, but the Reserve Bank of Australia is yet to be convinced that price ...

The halving of fuel excise was part of an $8.6 billion cost-of-living support package announced in the budget and came after petrol prices spiked above $2 a litre as global oil prices rose due to the war in Ukraine. Labor has no intention of extending the cut in fuel excise beyond the legislated six months. "We think this explains much of the lift in sentiment, though the focus on relieving cost of living pressures in the federal budget may also have played a part." "The fall in petrol prices is likely due to lagged effects of the drop in crude prices since March 8, which have declined by nearly 20 per cent since then," ANZ head of Australian economics David Plank said. The fall in petrol prices appears to have tamed concerns over the inflation outlook, but the Reserve Bank of Australia is yet to be convinced that price pressures have cooled. "The board will assess this and other incoming information as it sets policy to support full employment in Australia and inflation outcomes consistent with the target." "Higher prices for petrol and other commodities will result in a further lift in inflation over coming quarters," Dr Lowe said, noting important inflation and wage growth figures are due in coming months.

The Reserve Bank of Australia announced Tuesday its decision to keep the cash rate target unchanged at 0.1%. Markets in Hong Kong and mainland China were closed ...

Markets in Hong Kong and mainland China were closed on Tuesday for a holiday. Following that decision the Australian dollar surged more than 1% to $0.7626, continuing to trek upward after yesterday's jump from below $0.75. In Japan, the Nikkei 225 climbed 0.19% to close at 27,787.98 while the Topix index shed 0.23% to 1,949.12.South Korea's Kospi ended its trading day fractionally higher at 2,759.20. Elsewhere, Australia stocks rose as the S&P/ASX 200 advanced 0.19% on the day to 7,527.90.In Southeast Asia, Singapore's Straits Times index gained 0.39%, as of 3:15 p.m. local time. The U. S. dollar index, which tracks the greenback against a basket of its peers, was at 98.886 after touching an earlier high of 99.028.The Japanese yen traded at 122.65 per dollar, weaker as compared with levels below 122 seen against the greenback last week. SINGAPORE — Shares in Asia-Pacific were mixed on Tuesday, while the Reserve Bank of Australia kept its cash rate target unchanged.

Michele Bullock will make her first appearance as deputy governor of the Reserve Bank of Australia when she faces a Senate hearing following last week's federal ...

The AUDUSD has surged to a 9-month high at .7639 (1.15%), following a more hawkish RBA meeting and a lift in the commodity complex overnight.

• Open an account in Singapore A theme we first touched on in March . • Open an account in Australia

The fall in petrol prices appears to have tamed concerns over the inflation outlook, but the Reserve Bank of Australia is yet to be convinced that price ...

"The fall in petrol prices is likely due to lagged effects of the drop in crude prices since March 8, which have declined by nearly 20 per cent since then," ANZ head of Australian economics David Plank said. "We think this explains much of the lift in sentiment, though the focus on relieving cost of living pressures in the federal budget may also have played a part." The halving of fuel excise was part of an $8.6 billion cost-of-living support package announced in the budget and came after petrol prices spiked above $2 a litre as global oil prices rose due to the war in Ukraine. "But to be up-front with Australians, no matter who wins government in May, it is likely that that petrol price relief will end." The fall in petrol prices appears to have tamed concerns over the inflation outlook, but the Reserve Bank of Australia is yet to be convinced that price pressures have cooled. "The board will assess this and other incoming information as it sets policy to support full employment in Australia and inflation outcomes consistent with the target."

The Reserve Bank has revealed its cash rate call for April, as inflation and costs continue to creep higher. The Reserve Bank of Australia (RBA) has decided ...

“Over coming months, important additional evidence will be available to the Board on both inflation and the evolution of labour costs. “We anticipate refinancing activity to continue as we head toward the middle of the year and the likelihood of more rate increases.” But Dr Lowe noted that rising prices have placed pressure on household budgets, while the recent floods have caused hardship for many communities. With the “tightness” of the labour market, the RBA has forecast a further pickup in wages growth and labour costs. “The outlook for housing prices later in the year is one of a balance between higher mortgage rates and higher income growth the RBA is looking to see before raising rates,” he said. “While there is always much speculation about what action the RBA will take and the timing of any rate increases, mortgage holders also need to be prepared for what their lender is about to do.” The Reserve Bank’s central forecast is for the unemployment rate to fall below 4 per cent in the coming months and to remain there in 2023. RBA governor Mr Lowe has previously said a pickup in the cash rate seems “plausible”, as economists have speculated the first increase could come around August to September, or as soon as June. The board will assess this and other incoming information as its sets policy to support full employment in Australia and inflation outcomes consistent with the target.” “The main sources of uncertainty relate to the speed of resolution of the various supply-side issues, developments in global energy markets and the evolution of overall labour costs,” he said. “Inflation has picked up and a further increase is expected, but growth in labour costs has been below rates that are likely to be consistent with inflation being sustainably at target,” Dr Lowe said. As previously outlined by the central bank, it will not raise the rate until annual inflation is “sustainably” within the 2 to 3 per cent range – meaning annual wages growth will also need to rise above 3 per cent.

How will the first official interest rate rise in a dozen years look a week or two before the election when the politicians are shouting “cost of living”?

The wording of Dr Lowe’s statement backs him into a corner of requiring some sort of strong wages/earnings growth figure before taking the foot off the monetary accelerator – an accelerator that is flat to the floor while economic and jobs growth are strong and the government is throwing extra billions at the voters for the sake of the election. Dr Lowe said the RBA will be assessing “important additional evidence” on inflation and labour costs “over coming months”. The commentariat is taking that to mean a rate rise in June. Governor Lowe’s post-board meeting release stated the obvious that “inflation had picked up and a further increase is expected”, but “growth in labour costs has been below rates that are likely to be consistent with inflation being sustainably at target”.

The Reserve Bank's decision to keep the cash rate on hold will come under scrutiny at a parliamentary hearing. Michele Bullock will make her first ...

He also warned that the rate of inflation - already at 3.5 per cent - is expected to grow further in coming quarters, and that the board will be monitoring the data closely from now on. The RBA left the the cash rate at a record low of 0.1 per cent at Tuesday's monthly board meeting. His comments came as the Reserve Bank of Australia appeared to be laying the groundwork for an interest rate rise in coming months.

Australia is in a precarious position as inflation expectations soar and forecasts predict a very worrying sign for mortgages. It's not all bad news though.

It is also worth pointing out that interest rates are a demand management tool. And there is little reason why the RBA would lift rates as aggressively, thereby engineering an unnecessary house price crash or recession. Such a rapid increase in mortgage repayments would crash the housing market and economy, which is exactly why the RBA is unlikely to raise rates as swiftly nor as far as the market is predicting. Given Australia’s current inflationary pressures are mostly imported, including via petrol prices, there is little sense in the RBA hiking rates aggressively to counter imported (cost-push) inflation. Even a 1 per cent lift in mortgage rates would see median monthly mortgage repayments rise by 13 per cent or $343, with Sydney buyers facing a larger $518 per month increase in median mortgage repayments. If the discount variable mortgage rate was to rise by 2.9 per cent to 6.5 per cent, as predicted by the futures market, then mortgage repayments would lift by 39 per cent from their current level.