A six-word change in Reserve Bank language has given hard-pressed home buyers, struggling businesses and distressed renters a crack of hope.
Six weeks ago, as cashed-up Taylor Swift fans splashing out on expensive tote bags prompted fears that excess spending would fuel inflation, the bank warned that “a further increase in interest rates cannot be ruled out”.
A little ray of sunshine has been offered by Michele Bullock to borrowers.Credit: Oscar Colman
It came as a surprise to economists and analysts as many believed there was enough evidence to show inflation was coming down faster than expected and that the economy was already labouring under the RBA’s rate hikes of 2023.
RBA governor Michele Bullock used her first press conference in charge of the institution to argue “we have maintained the option that it might be that there has to be more rate rises”.
Six weeks on, Swifties are at home watching re-runs of The Eras Tour on Disney+, saving every cent for a copy of The Tortured Poets Department. And the Reserve Bank now says that when it comes to interest rates, it is “not ruling anything in or out”.
Gone is an explicit suggestion that the next move could be up. By not ruling anything in or out, the bank has actually given itself the cover to start considering a rate cut later this year.
Bullock admitted that the language had changed “in response to some data”.
The only data of note since her first press conference has been monthly inflation, which showed price pressures easing faster than forecast, employment figures revealing an unexpected uptick in unemployment, and the national accounts, which confirmed an economy a couple of boatloads of iron ore away from contracting.
Six little words that give hope to Australia’s mortgage holders
12
21
19.03.2024
A six-word change in Reserve Bank language has given hard-pressed home buyers, struggling businesses and distressed renters a crack of hope.
Six weeks ago, as cashed-up Taylor Swift fans splashing out on expensive tote bags prompted fears that excess spending would fuel inflation, the bank warned that “a further increase in interest rates cannot be ruled out”.
A little ray of sunshine has been offered by Michele Bullock to........
© The Sydney Morning Herald
visit website
login
who are we?
contact us
qosheapp
Toi Staff
Gideon Levy
Belen Fernandez
Andrew Mitrovica
Mort Laitner
Ali Fathollah-Nejad
Rami G Khouri
Nikkei Editorial
