The chief executive of the largest home lender says inflation remains too high. The market is at odds with the RBA, which has all but ruled out a cut this year.
Already a subscriber?The chief executive of Australia’s largest home lender has sided with the Reserve Bank and warned that spending must be “constrained” after the central bank effectively ruled outThe Australian Financial Review
The RBA – and Mr Comyn – are at odds with market expectations, with traders suggesting there is a 50 per cent chance of a rate cut by November. They have almost fully priced in at least one fall in the official cash rate by Christmas.that the economy is still too strong and that government spending has pushed inflation higher, after the central bank said it no longer expected underlying inflation to return to the mid-point of its 2 per cent to 3 per cent target band until December 2026.
He added: “It will be important to keep demand constrained across the economy so inflation returns to the target band.” The RBA also expects federal and state government spending to increase by 4.3 per cent in the year to the end of December, far higher than its previous forecast of 1.5 per cent, after a wave of big-spending government budgets between May and June.
Australia faced challenges with productivity and housing affordability, but was still in a stronger position then other economies, he said, adding that unemployment remained low, business investment high and exports strong. “Australia has several structural advantages that provide optimism for the future,” he said.Investors were broadly supportive of CBA’s result, pushing the stock 0.85 per cent, or $1.12, higher to $133.64 by the mid-afternoon. The $9.
United States Latest News, United States Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
RBA interest rates: No rate cuts before Christmas, says RBA governor BullockMichele Bullock has declared “near-term interest rate cuts are not on the agenda”, warning the economy remained too hot and ruling out decreasing the cash rate before Christmas.
Read more »
Interest rates Australia: RBA governor Michele Bullock talks tough, but board can’t stomach raising ratesThe RBA has squibbed again this month. With long-run credibility on the line, it needs to focus on getting inflation inside the target band.
Read more »
Interest rates: RBA to hold rates steady as inflation gets closer to targetThe central bank is expected to oversee a “straightforward” meeting this week, after last week’s inflation result took the heat out of tightening fears.
Read more »
RBA interest rates: Why the Reserve Bank’s rates warning won’t mean much to investorsAndrew Hauser says it’s a risk to listen to “false prophets” on interest rates. But those in the market have little choice but to take a position as a crucial turning point looms.
Read more »
Interest rates: If the RBA was doing its job, it would immediately lift ratesA hot inflation figure on Wednesday would show we are in the grip of a structurally persistent crisis which has been underestimated in three of the last four quarters.
Read more »
RBA interest rates: Traders don’t the Reserve Bank’s ‘no rate cut’ warning this yearBond markets are still wagering that the Reserve Bank will cut interest rates this year even as the central bank said it considered a rise on Tuesday.
Read more »