From Capital Economics, a 12-month view on Reserve Bank of Australia policy
The Cap Eco note is long and detailed, but in summary:
- Despite the strengthening of the activity data, the Reserve Bank of Australia won't raise interest rates from 1.5% at the meeting on Tuesday 6th February and probably won't hint in the following Friday's Statement on Monetary Policy that rate hikes are just around the corner either.
- The rising Australian dollar has already tightened financial conditions and the outlook for inflation is still weak.
- Our money is on the RBA leaving interest rates at 1.5% at all eleven policy meetings this year.
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Note - coming up from the Bank next week ...
The Bank meet next Tuesday (February 6), the first meeting of 2018.
- On Thursday (February 8) next week Governor of the Bank Philip Lowe speaks at the A50 Australian Economic Forum dinner
- On Friday following (February 9) the Bank publish its first Statement on Monetary Policy for the year
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