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cash rate

Latest news and analysis on cash rate

Macro

US tariffs point to a sharp US contraction & global downturn

The latest US tariffs plus extreme policy uncertainty point to a sharp decline in US output and the risk of a synchronised global downturn
Kieran Davies
Coolabah Capital
Macro

RBA cuts by 25bp, cautious on more cuts given inflation does not return to the 2½% target

The RBA cut rates, but was cautious in signalling more cuts given underlying inflation is no longer forecast to hit the 2½% target.
Kieran Davies
Coolabah Capital
Macro

RBNZ to cut further on rising unemployment

NZ remained in recession at the end of last year, with unemployment rising above 5% and employment falling again in Q4.
Kieran Davies
Coolabah Capital
Macro

RBA still likely to argue demand is exceeding supply

Updated RBA estimates of spare capacity suggest that demand still exceeds supply, both in terms of activity and the labour market.
Kieran Davies
Coolabah Capital
Macro

Productivity vs population in driving the US and Australian economies

US economic outperformance reflects superior labour productivity, while Australia continues to be powered by strong population growth.
Kieran Davies
Coolabah Capital
Macro

RBA: "no evidence that monetary policy overall is more potent in Australia"

A senior RBA official has acknowledged that there is "no evidence that monetary policy ... is more potent in Australia than ".
Kieran Davies
Coolabah Capital
Macro

RBA: Policy not as tight as peers, which is why inflation is higher

The RBA has highlighted how policy is less tight than other countries, such that inflation is higher than in nearly all its peers.
Kieran Davies
Coolabah Capital
Macro

The room to cut interest rates across countries

The RBA never raised rates by as much as other countries, so it has relatively less scope to cut them in a soft economic landing.
Kieran Davies
Coolabah Capital
Macro

Persistent excess demand vs returning inflation to target

The RBA optimistically expects inflation will return to target without spare capacity emerging in the economy.
Kieran Davies
Coolabah Capital
Macro

Financial stability & its potential bearing on eventual RBA rate cuts

The RBA is alert to the possibility that eventual rate cuts might spur risky borrowing by already-heavily-indebted households.
Kieran Davies
Coolabah Capital
Macro

The public sector’s role in propping up growth and jobs

The public sector has accounted for all the growth in GDP over the past year and made the largest contribution to strong jobs growth.
Kieran Davies
Coolabah Capital
Macro

RBA optimism on the economic outlook to be tested

History suggests that the RBA finds it very hard to fine-tune the economy.
Kieran Davies
Coolabah Capital
Macro

Fed policy, the Sahm rule and the risk of recession

Rising unemployment has almost reached the "Sahm rule" threshold that has historically been a useful guide to US recessions.
Kieran Davies
Coolabah Capital
Macro

RBNZ starts to set the stage for rate cuts this year

Continued economic weakness has seen the RBNZ open the door for considering rate cuts this year.
Kieran Davies
Coolabah Capital
Macro

The RBA should hike in August

Underlying inflation is proving more persistent than the RBA had expected.
Kieran Davies
Coolabah Capital
Macro

Policy rules point to central banks diverging on rates

A policy rule still points to a slow/shallow rate cut cycle in the US, steady rate cuts in the EA, and that the RBA should hiked a bit more.
Kieran Davies
Coolabah Capital
Macro

A more resilient consumer and excess savings

The consumer looks in better shape than the RBA had feared, with spending revised up as households tap still-substantial excess savings.
Kieran Davies
Coolabah Capital
Macro

Signal and noise in the April unemployment rate

Unemployment has picked up, but the labour market remains tight with the RBA raising its estimate of the NAIRU.
Kieran Davies
Coolabah Capital
Macro

Conflicting messages on policy from the RBA

The RBA thinks rates are at the right level to to return inflation to target, but discussed hiking today and warned on upside risks.
Kieran Davies
Coolabah Capital
Macro

Higher inflation should see the RBA revise up its outlook

History suggests that there is the risk that the RBA revises up its longer term forecasts of inflation.
Kieran Davies
Coolabah Capital
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