The most recent communication from the Reserve Bank of Australia are the Minutes of the April monetary policy board meeting.
In which, a key quote is:
- Members also discussed the scenario where inflation did not move any higher and unemployment trended up, noting that a decrease in the cash rate would likely be appropriate in these circumstances.
Let me rejig that quote:
- a decrease in the cash rate would likely be appropriate (in a) scenario where inflation did not move any higher and unemployment trended up
Let me summarise what would be required for a rate cut then …
inflation did not move any higher
and
unemployment trended up
Bolding is mine.
So what have we got?
Inflation, according to the latest data:
is certainly not moving up.
Unemployment did tick up, from 4.9% to 5% in the latest data on the labour market. Which is not 'trending higher' (though it may in future).
If you apply that algorithm:
inflation did not move any higher
and
unemployment trended up
Key word there, and …. you'd have to say no rate cut yet. Yes, no?
