In a nutshell:
- There is no new data on Australian CPI inflation, the most recent reading being 3.5% (headline, annual) and 2.6% (trimmed mean, annual) in the December quarter of 2021, above (within) the RBA’s official target band of 2-3%. GDP grew by 3.4% in the December quarter of 2021, exceeding market forecasts of around 3%.
- The RBA Shadow Board’s verdict is, once again, strongly in favour of keeping the cash rate steady at its historic low; it is 86% confident that this is the appropriate policy setting.
- However, at longer time horizons the Shadow Board’s consensus is shifting towards a tightening of the monetary stance.
And:
- The probabilities at longer horizons are as follows: 6 months out, the confidence that the cash rate should remain at 0.1% weakened substantially, from 51% in March to 33% in the current round
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The Reserve Bank of Australia 'shadow board' is made up of 9 voting members and 1 non-voting chair. An initiative sponsored by the Australian National University's Centre for Applied Macroeconomic Analysis (CAMA)
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Earlier posts:
AUD snoozing ahead of the 2.30pm (Sydney time) RBA announcement (0430 GMT)
