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MNI RBA Preview - June 2024: Higher For Longer, Stance Change Unlikely

We do not expect the RBA to change rates or its stance at its June 18 meeting in line with consensus.

Central Bank PreviewHomepageCentral Bank ReportsRBA - PreviewMarkets

EXECUTIVE SUMMARY:

  • We do not expect the RBA to change rates or its stance at its June 18 meeting in line with consensus. Given this is widely expected, the focus will be on the statement and Governor Bullock’s press conference following the announcement. We expect that the Board will continue not to rule “anything in or out”, but the key will be if it retains its vigilance “to upside risks” to inflation.
  • Data since the May meeting have not been too far off expectations and comments from RBA officials have been in line with its stance and those made previously. Staff forecasts will be unchanged at the June meeting too. Thus its seems unlikely that the Board will change its stance or its guidance materially. Governor Bullock is likely to be asked again at the press conference that follows if a hike was discussed.
  • Disinflation appears to have stalled in 2024 according to the monthly data but Bullock warned at her appearance before the senate economics committee this month that since the monthly CPI is not as comprehensive as the quarterly one the RBA is waiting for Q2 CPI on July 31 to confirm if disinflation has stalled. This along with updated forecasts including new fiscal measures makes the August 6 meeting important for the monetary policy outlook.

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RBA Preview - June 2024.pdf

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EXECUTIVE SUMMARY:

  • We do not expect the RBA to change rates or its stance at its June 18 meeting in line with consensus. Given this is widely expected, the focus will be on the statement and Governor Bullock’s press conference following the announcement. We expect that the Board will continue not to rule “anything in or out”, but the key will be if it retains its vigilance “to upside risks” to inflation.
  • Data since the May meeting have not been too far off expectations and comments from RBA officials have been in line with its stance and those made previously. Staff forecasts will be unchanged at the June meeting too. Thus its seems unlikely that the Board will change its stance or its guidance materially. Governor Bullock is likely to be asked again at the press conference that follows if a hike was discussed.
  • Disinflation appears to have stalled in 2024 according to the monthly data but Bullock warned at her appearance before the senate economics committee this month that since the monthly CPI is not as comprehensive as the quarterly one the RBA is waiting for Q2 CPI on July 31 to confirm if disinflation has stalled. This along with updated forecasts including new fiscal measures makes the August 6 meeting important for the monetary policy outlook.

Click here for full preview:

RBA Preview - June 2024.pdf