RBA SOMP: Solid growth of around 3% ahead - Rabobank
The latest RBA’s Statement on Monetary Policy, predicts solid economic growth of Australian economy of around 3% ahead (because despite having blown a huge housing bubble and created epic household debt, the RBA are nothing but optimists, presumably because their economic models don’t incorporate household debt – which is why they let it rise so much), points out the research team at Rabobank.
“Wage growth and inflation projections were both revised down due to a shift towards lower-paid work: ‘iron ore to iron abs’. As such, at best the RBA are on hold for a long time; and if the lack-of-private-debt-in-their-models issue comes back to bite them ahead, the risks are of a rate cut, not a rate hike. With the Fed set to go in December, taking Fed Funds to the same rate at the RBA’s 1.50%, how AUD is still at 0.7564 today amazes.”