As expected, the RBA kept the policy rate unchanged at 4.35 per cent when it met earlier in the week.

Furthermore, despite a plethora of disingenuous political commentary around monetary policy recently, RBA Governor, Michele Bullock gave a clear outline of the rationale behind the RBA’s stance while acknowledging that the RBA is alert to the risks around its central case forecasts.

Put very simply, in the RBA view demand is still running ahead of supply, making for “sticky” inflation and until that state of excess demand is resolved, current policy settings will remain.

Read Stephen’s ‘On the other hand’ here

Stephen Miller

Stephen Miller is GSFM’s market strategist. His expertise in international economic and policy analysis, as well as domestic and global economic and financial market developments, has resulted in him becoming a regular commentator on central banks, rates and inflation.

Information provided is general information and is for educational purposes only, and does not include, or constitute as, financial product advice.