Category Archives: monetary policy

Q1’19 CPI makes strong case for 7 May RBA cut

The slow pace of inflation in Q1 makes a very strong case for a 25 bps reduction of the RBA’s policy rate on 7 May, to 1.25%. The key trimmed mean inflation measure increased 28bps to be 1.6% higher over … Continue reading

Posted in AUD, CPI, economics, monetary policy, RBA, Uncategorized | 4 Comments

Q1’19 CPI, the RBA and May

The case for the RBA to cut their cash rate at their 7 May meeting has been beaten up by the RBA’s own views on the GDP data, but I still think that the data makes a decent case for … Continue reading

Posted in AUD, CPI, economics, monetary policy, RBA | Tagged | 4 Comments

IMF downgrades, RBA to follow

The IMF today downgraded global growth 20bps to 3.3%yoy (lowest since GFC), and said that the risks are skewed to the downside. Among Australia’s key trading partners, Chinese growth was bumped up 10bps to 6.3%yoy; Japanese growth -10bps to 1%yyo; … Continue reading

Posted in AUD, economics, monetary policy, RBA | 6 Comments

What’s the State of the Economy?

The RBA made a subtle change to their concluding paragraph of their April post-meeting statement last week. Given that they had used the same words for the prior thirteen statements, and that the change occurred alongside downgrades to domestic and … Continue reading

Posted in AUD, economics, monetary policy, RBA | 1 Comment

RBA sets up for May

The RBA today set up for a rate cut on 7 May. After thirteen months in a row where they cut and paste the following words: the Board judged that holding the stance of monetary policy unchanged at this meeting … Continue reading

Posted in AUD, economics, monetary policy, RBA | 4 Comments

The case for an April easing bias

The RBA board will discuss the disappointing Q4’18 GDP data for the first time at their 2 April board meeting. The size of the downgrade is so large, and the domestic and global data for Q1’19 has been so weak, … Continue reading

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Another look at Nominal Household Income

I was a little thrilled when I saw a link to my blog from a Scott Sumner post on econlib (thanks Rajat!). Scott took a look at my NGDP post and said that he prefers total labor compensation — which … Continue reading

Posted in AUD, economics, monetary policy, RBA | 2 Comments

The GDP v. Jobs non-puzzle

Today’s speech by RBA Gov Lowe said that they were puzzling about the concurrent GDP slowdown and strength in the labour market.  Other indicators of the economy, though, paint a softer picture. We will receive another reading on GDP growth … Continue reading

Posted in AUD, economics, monetary policy, RBA | 7 Comments

Australia’s household cash-hole

When thinking about Australia and the outlook for policy, I find it hard to get past the below chart. It compares the growth rate of household gross domestic income to household consumption expenditure (both nominal YoY). When the black line … Continue reading

Posted in AUD, economics, monetary policy, RBA | 7 Comments

The RBA’s neutral bias

The RBA went back to an explicitly neutral bias at their Feb’19 policy window — via an interesting bit of subtlety. The central forecast remains for a gradual decline of the unemployment rate and a very modest acceleration of core … Continue reading

Posted in AUD, economics, monetary policy, RBA | 10 Comments