Reserve Bank of Australia Governor lowe spoke earlier:
Further remarks now:
- will not hike rates to control house prices
- says very low probability of wages picking up fast enough to need rate hikes in 2022
- chance of unwinding the 10 years of slow down in wages growth is very, very low, close to zero chance
A translation of these points is that the RBA will do nothing to slow surging house prices. But, on the other hand, if wages growth does rise fast they'll slam the brakes on. If you are a potential house buyer in a low wage bracket you're on a hiding to nothing.
More:
- would be prepared to look through a transitory spike in core inflation
And, there we are, is this the first mention of the RBA jumping on the 'transitory' bandwagon? Up until now they really haven't needed to. And they still don't at this stage. But that looks like the next box to be ticked ahead.
More again:
- hopeful the neutral cash rate could be at least as high as 2.5%
- would welcome release of monthly CPI data in Australia
- would be prepared to respond to a very, very sharp rise in inflationary pressures
- intends to review policy framework in 2022
- to review experience with policy measures through pandemic
