November 28, 2024 at 09:23AM
We are aiming for inflation at 2.5%
As long as inflation continues on its gradual slowing path, we will be in position to consider cutting rates at some point
We don’t need inflation to be at target to cut rates
But we need to be sure it is heading there
If inflation picks up again, that would be a big red flag for us
We can hold rates where they are for now in waiting for inflation to slow further
Both the RBA and markets in general will be waiting for evidence of this before really considering any rate cut pricing. As things stand, markets are seeing the first full 25 bps rate cut only in May. The odds of a rate cut in December and February at this point are pretty much nil.
This article was written by Justin Low at www.forexlive.com.
