Reserve Bank of Australia Deputy Governor Andrew Hauser
- CPI data were very welcome (ICYMI, CPI lower)
- Trimmed mean dead in line with our forecasts
- Full impact of tariffs is yet to come
- This will be a real tax increase in the US
- Our forecasts were based on rates falling gradually toward 3.2%
- Models of neutral rate give very different answers, does not drive policy decisions
- the unemployment numbers were in line with our forecasts
- Unemployment is still very low
- the Australian labour market is still close to full employment
- Expects to see further recovery in consumer spending
- Consumer confidence is pretty weak
- weak productivity may lower speed limit of recovery
- If unemployment did rise sharply the RBA would have to react, but this is not our central forecast
Hauser is sending a bit of a mixed message here. While he seems satisfied with the move in inflation he is flagging a still tight labour market. The higher unemployment data (that Hauser seems to shrug off here) was a major plank of an expected August rate cut. I don't think his comments negate that expectation but its food for thought.
---
I'll have the headlines, but live link here if you prefer.
