RBA lifts rates 25bp
The Reserve Bank board has increased the cash rate by 25 basis points to 3.35%.
The RBA confirmed market expectations with the increase which the Government, Philip Lowe, attributed to continuing inflationary pressures.
The rise follows on from the RBA’s 25 basis point December rate rise.
Lowe said global inflation remains very high. It is, however, moderating in response to lower energy prices, the resolution of supply-chain problems and the tightening of monetary policy. It will be some time, though, before inflation is back to target rates. The outlook for the global economy remains subdued, with below average growth expected this year and next.
“In Australia, CPI inflation over the year to the December quarter was 7.8 per cent, the highest since 1990. In underlying terms, inflation was 6.9 per cent, which was higher than expected. Global factors explain much of this high inflation, but strong domestic demand is adding to the inflationary pressures in a number of areas of the economy.”
“The Board expects that further increases in interest rates will be needed over the months ahead to ensure that inflation returns to target and that this period of high inflation is only temporary. In assessing how much further interest rates need to increase, the Board will be paying close attention to developments in the global economy, trends in household spending and the outlook for inflation and the labour market. The Board remains resolute in its determination to return inflation to target and will do what is necessary to achieve that.”
Is Lowey the drunkest P Plate driver of the RBA we have ever had?
Peddle to the metal, 200 KM / Hr screaming out the window faster, faster, faster – even in November 2021 Lowey “maintained it was still entirely possible that the cash rate will remain at its current level until 2024″ = 0.1%.
For at least 12 mths, Nov 2020 to Nov 2021 Lowey screamed out the window he would continue to stomp the ultra-low interest rate accelerator and throw nitro into the tank with QE until 2024 !!!!!!!!!!
Yet before mid 2022 started, Lowey had too jam on the brakes, 0.35, 0.85, 1.35, 1.85 and our drunk P Plate RBA boss had well and truly jumped on all the brakes, the foot brake, the hand brake and the bloody parachute were out to stop the speeding drunk driven vehicle.
But it was too late to easily stop, more brakes to 2.35, 2.6, 2.85, 3.1 and now 3.35 = 9 consecutive months of slamming on the brakes. And it’s still out of control says Lowey.
Thanks for the steady as she goes driving RBA, can’t wait until you plow us all into the recession wall.