The minutes from the RBA's December meeting indicate that while the board kept interest rates on hold, they are increasingly considering a rate cut in the future.
RBA board members at the December meeting kept interest rate on hold, but the minutes show they believed it had become harder to make that call.Financial markets don’t expect a cut until April but a fall in the Australian dollar on Monday suggests confidence one is on the cardsConsumers are predicted to splash $3.7bn in the last week of 2024 on top of an expected $70bn in the lead-up to Christmas, according to projections from the Australian Retailers Association and Roy Morgan. The splurge, 2.
7% more than households spent over the last week of 2023, would continue a resurgence in consumer spending, which the RBA has singled out as a key factor in deciding if a rate cut below the current 4.35% is warranted.Minutes of the RBA’s December board meeting, released on Tuesday, show the board believed it was “too soon to judge” whether a Black Friday bump in sales would carry beyond the end of the year.The board will next weigh whether to cut, hike or hold interest rates in February, when it will have revised forecasts and new data on spending, inflation and jobs. “If the future flow of data continued to evolve in line with, or weaker than, their expectations … it would, in due course, be appropriate to begin relaxing the degree of monetary policy tightness,” the minutes read.Financial markets still expect no cut until April after the minutes were published, though the Australian dollar fell to 62.35 US cents, from 62.58 US cents on Monday, suggesting stronger bets a cut is forthcoming.on the grounds the economy was still too hot, but the minutes show they believed it had become harder to make that call. However, the board believed the risks of economic activity slowing down had started to outweigh the risks of it picking up too fast, after saying the risks were evenly balanced the month befor
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