The RBA cash rate decision on Tuesday, while a welcome relief to many and in line with expectations, was a bit of a head-scratcher. There was a gap in logic between the decision and the explanation.
The board statement said that “these factors give the board more confidence that inflation is moving sustainably towards the midpoint of the 2-3 per cent target range”. But the forecasts for inflation in the accompanying Statement on Monetary Policy (SMP) were revised up and are for underlying inflation to flatline above the midpoint. These things appear contradictory.
Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.