From Craig James, Chief Economist, CommSec (part of the Commonwealth Bank of Australia) on the Reserve Bank of Australia minutes today
In brief, and bolding is mine:
- There is a clear change in the Reserve Bank's attitude to inflation. The latest Board minutes highlight the recent lift in commodity prices as well as perceptions that economic growth for advanced nations could exceed "potential growth".
- Admittedly the Reserve Bank isn't flashing warning signs on growth and inflation. But it should also be noted that in the period since the Reserve Bank Board meeting there has been the election of a new US President with growth-focussed economic policies. Metal and mining prices and bond yields have soared.
- Simply interest rate settings are likely to remain stable until well into 2017
And:
- Could the next move in interest rates be a rate hike rather than a rate cut? It's important not to get too far ahead of ourselves. Inflation is still historically low. And while there is speculation of growth-focussed policies in the US, they haven't been fleshed out. However you get a sense that inflation has reached an inflexion point.
Worthwhile commentary from James here.
