RBA Recap
- The RBA is under significant pressure, being required to master balancing inflation with preserving employment.
- Upcoming Q2 CPI data and other economic indicators will be crucial for the RBA’s decision making.
- The path to achieve their desired outcomes is looking increasingly narrow and not nearly as smooth. There is growing uncertainty and waning confidence in light of recent data releases, depicting higher than expected inflation and weak GDP growth.
The Australian Economy
- The new six-weekly meeting schedule of the RBA has allowed the calendar-dependent luxury of digesting two iterations of the same data print between meetings.
- Decreasing demand for employers and a rising supply of labour has contributed to easing in wages growth in Q1 in the mid-May data release. Q4 2023 annual wage growth flirted with the highest level on record (since 1998).
- All eyes will turn to the Q2 inflation print on July 31st, inflationary pressures persisted since the last RBA meeting and remain a headache for policy makers. Australian households cashed up from EOFY tax cuts could determine which way the pendulum swings in August.
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