Highlights:
The Reserve Bank of Australia's (RBA) board convened to discuss the current economic landscape and monetary policy.
International Economic Conditions
The board noted that global economic risks had balanced recently, with mixed growth trends in advanced economies. While the US showed robust growth, other advanced economies exhibited weaker performance. Inflation remained high, with persistent core services price inflation posing a challenge to lowering inflation rates.
China's Growth and Commodity Prices
China's economic growth picked up, targeting around 5% for 2024, driven by a rise in net exports. However, the property market remained weak, necessitating policy support. Commodity prices, including iron ore and coking coal, increased due to China's stronger economic outlook and supply constraints.
Domestic Economic Conditions
Consumer spending in Australia remained weaker than expected in early 2024. Despite higher household disposable income, saving rates increased. Business investment and public sector spending grew strongly, with significant contributions from non-residential construction and investment in intangibles.
Labour Market and Inflation
The labor market showed resilience, with unemployment rates modestly above late-2022 levels. Inflation eased in March but remained above target, driven by high domestic cost pressures. Goods price inflation eased, but services price inflation stayed high.
Financial Conditions
Expectations for central bank policy rates rose, particularly in the US and Australia, pushing sovereign bond yields higher. The Australian dollar appreciated slightly, influenced by commodity prices and yield differentials.
Monetary Policy Decision
The board decided to keep the cash rate target unchanged at 4.35%. They emphasized the importance of returning inflation to target within a reasonable timeframe while supporting gradual labor market adjustments. The board acknowledged the increased risks of prolonged inflation but deemed the current path of monetary policy appropriate given the balanced risks and credible forecasts for inflation returning to target.
The board reiterated its commitment to monitoring economic developments and adjusting policy as necessary to achieve its inflation and employment objectives.
Customer Notice:
Nextgen Global Services Pty Ltd trading as Kapitales Research (ABN 89 652 632 561) is a Corporate Authorised Representative (CAR No. 1293674) of Enva Australia Pty Ltd (AFSL 424494). The information contained in this website is general information only. Any advice is general advice only. No consideration has been given or will be given to the individual investment objectives, financial situation or needs of any particular person. The decision to invest or trade and the method selected is a personal decision and involves an inherent level of risk, and you must undertake your own investigations and obtain your own advice regarding the suitability of this product for your circumstances. Please be aware that all trading activity is subject to both profit & loss and may not be suitable for you. The past performance of this product is not and should not be taken as an indication of future performance.
Kapitales Research, Level 13, Suite 1A, 465 Victoria Ave, Chatswood, NSW 2067, Australia | 1800 005 780 | info@kapitales.com
Feb 21, 2025
Feb 21, 2025
Feb 20, 2025
Feb 20, 2025
Feb 20, 2025
Feb 18, 2025
Feb 18, 2025
Feb 18, 2025
Feb 17, 2025
Feb 17, 2025
Nextgen Global Services Pty Ltd trading as Kapitales Research (ABN 89 652 632 561) is a Corporate Authorised Representative (CAR No. 1293674) of Enva Australia Pty Ltd (AFSL 424494). The information contained in this website is general information only. Any advice is general advice only. No consideration has been given or will be given to the individual investment objectives, financial situation or needs of any particular person. The decision to invest or trade and the method selected is a personal decision and involves an inherent level of risk, and you must undertake your own investigations and obtain your own advice regarding the suitability of this product for your circumstances. Please be aware that all trading activity is subject to both profit & loss and may not be suitable for you. The past performance of this product is not and should not be taken as an indication of future performance.