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MNI: RBA To Hold Rates Despite Soft Data - Ex Staff

The RBA will look through recent soft data on CPI and labour and hold the cash rate steady, former staffers tell MNI.

Recent soft data has iced further rate hikes, but uncertainty – particularly on future productivity growth – could still see the Reserve Bank of Australia leave the cash rate steady at 4.35% over 2024, former staffers told MNI.

Jonathan Kearns, former head of the RBA’s financial stability department and now chief economist at Challenger, said recent labour metrics contained noise and could give those wanting near-term rate cuts false hope. "Markets assume the RBA has done with rate hikes and is on a cutting path from here, but I think that’s kind of ambitious,” Kearns added, noting the RBA will consider the recent unemployment result to be in line with its forecasts.

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Recent soft data has iced further rate hikes, but uncertainty – particularly on future productivity growth – could still see the Reserve Bank of Australia leave the cash rate steady at 4.35% over 2024, former staffers told MNI.

Jonathan Kearns, former head of the RBA’s financial stability department and now chief economist at Challenger, said recent labour metrics contained noise and could give those wanting near-term rate cuts false hope. "Markets assume the RBA has done with rate hikes and is on a cutting path from here, but I think that’s kind of ambitious,” Kearns added, noting the RBA will consider the recent unemployment result to be in line with its forecasts.

Keep reading...Show less