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MNI RBA Review-November 2024: RBA Still “Vigilant”

The RBA left rates at 4.35% in November as was unanimously expected.
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EXECUTIVE SUMMARY: 

  • The RBA left rates at 4.35% in November as was unanimously expected. The tone of the statement and guidance paragraphs was little changed and suggested another hawkish hold. The Board remains “vigilant to upside risks to inflation” and didn’t rule “anything in or out”. 
  • It still appears too early to discuss rate cuts but Governor Bullock would not give any rate guidance. She said that market OCR pricing was consistent with inflation not returning to target any time soon and its path, used in the updated forecasts, “was as good as any” – it shows around 50bp of easing in 2025.
  • The RBA notes that the November forecast update resulted in “very similar” projections to August. The downward revisions to the trimmed mean profile were only by 0.1pp, but it meant that it is expected to be at the top of the 2-3% band in Q2 2025 rather than in Q4 2025 but the mid-point is still projected for Q4 2026.
  • No easing is priced for this year, with June 2025 being the first meeting where a 25bp rate cut is fully anticipated. 

FOR THE FULL PUBLICATION PLEASE USE THE FOLLOWING LINK: RBA Review - November 2024.pdf

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EXECUTIVE SUMMARY: 

  • The RBA left rates at 4.35% in November as was unanimously expected. The tone of the statement and guidance paragraphs was little changed and suggested another hawkish hold. The Board remains “vigilant to upside risks to inflation” and didn’t rule “anything in or out”. 
  • It still appears too early to discuss rate cuts but Governor Bullock would not give any rate guidance. She said that market OCR pricing was consistent with inflation not returning to target any time soon and its path, used in the updated forecasts, “was as good as any” – it shows around 50bp of easing in 2025.
  • The RBA notes that the November forecast update resulted in “very similar” projections to August. The downward revisions to the trimmed mean profile were only by 0.1pp, but it meant that it is expected to be at the top of the 2-3% band in Q2 2025 rather than in Q4 2025 but the mid-point is still projected for Q4 2026.
  • No easing is priced for this year, with June 2025 being the first meeting where a 25bp rate cut is fully anticipated. 

FOR THE FULL PUBLICATION PLEASE USE THE FOLLOWING LINK: RBA Review - November 2024.pdf