Comments from WPAC on its outlook for Reserve Bank of Australia monetary policy, in a brief preview of the Jukly 6 policy meeting:
- The Minutes of the June Board meeting have given more support for Westpac's view that the Board will announce that it does not plan to extend the Yield Curve Target from the April 2024 bond to the November 2024 bond.
- Extending would imply that the Board does not expect to achieve its inflation and employment target until 2025.
- Given the improved pulse of the economic data in 2021, as signalled by the Leading Index, it seems unlikely that the Board would expect to have to wait until 2025 before it achieves the objectives necessary to justify the first cash rate increase since November 2010.
- We also expect that the Board will decide to maintain its policy of purchasing a total of $5 billion of AGS and state government bonds per week without setting a final target. That policy would allow maximum flexibility to align the program with the economy's progress towards full employment.
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More on the July 6 meeting:
- RBA minutes released yesterday - little new info
- RBA: Tapering in July
- NAB forecasts the RBA will not roll its YCC forward to November 2024
- Westpac forecasts the RBA will change to a flexible QE regime
- ANZ say the Bank to move to 'flexible' QE
- Reserve Bank of Australia set to begin to "dismantle" its QE program in July (ex-RBA Edwards)
- RBA to move towards unwinding unconventional policy in July - BofA
And, (much, much) further on down the road:
