Bloomberg
Published Feb 20, 2018 11:37
Updated Feb 20, 2018 15:54
RBA Sees Inflation Rising Only Gradually as Economy Strengthens
(Bloomberg) -- Australia’s central bank reiterated that inflation is expected to “only gradually” accelerate as the economy strengthens and wage pressures increase, in minutes of this month’s policy meeting.
Main Takeaways
State of Play
More of the same from the Reserve Bank of Australia: the economy is moving in the right direction with unemployment at 5.5 percent after a jobs bonanza in 2017; but few signals of that strength translating into higher wage growth. Policy makers are watching and waiting with little sign they will pull the trigger on higher rates until the jobless rate falls further and inflation is nearer the middle of their 2 percent to 3 percent target.
Key Quotes
The Background
The central bank has held interest rates for 16 meetings and achieved some success in boosting business investment and hiring -- yet this has so far failed to translate into higher wages and faster inflation. It expects to see gradual improvement on those fronts as unemployment falls toward 5 percent; meanwhile, with record-high household debt following an east coast property boom, policy makers are likely to remain cautious and traders see little chance of a tightening before December.
Written By: Bloomberg
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