A weekend report from Bloomberg on the potential for the RBA no longer needing to cut interest rates
The basic gist is in the quote from Paul Bloxham, chief economist at HSBC in Sydney:
- "For the past five years, Australia's story has been about absorbing the negative income shock from falling commodity prices and rebalancing growth away from mining investment. This drag on national incomes is now in the past" and "the emphasis Governor Lowe has given to the 'flexible' nature of the target suggests he is unlikely to feel compelled to respond to every CPI print."
The article touches on some of the economic indicators:
- Inflation - low
- Economic growth and employment growth - "holding up -- even if headline rates mask some weakness"
In a nutshell, that's a decent summary ... but the latest employment data was weak, as was non-headline inflation. So, are we at the end of the cutting cycle?
Dunno, what I do know is there is an RBA meeting tomorrow and for me thats the focus, not the dim and distant future.
