Already a subscriber?Bond traders are more confident that the Reserve Bank’s next interest rate move will be down despite governor Michele Bullock insisting that the outlook was highly uncertain and rates could still move in either direction.for the third consecutive time at the end of its two-day policy meeting on Tuesday. It was the first meeting for new deputy governor Andrew Hauser.
However, Tim Hext, head of government bond strategies at Pendal, said today’s statement had the same neutral tone as February, and that the May, August and November meetings would be more important because that is when the RBA updates its economic forecasts. “I’m worried about inflation. I still firmly believe that we are on a narrow path and there are risks on each side. That’s why the board has been cautious,” she said.
“If it looks like there are risks that that’s going to be extended, we do need to be concerned about that,” she said. “On the other hand, if we end up moving more quickly than forecast, then we might need to think about interest rate cuts.For Angus Coote, co-founder of Jamieson Coote Bonds, there is little doubt that the statement was “much move dovish” than the last. “reaffirmed employment and price stability as their goals, both of which are decaying,” he said.
Source: Loan Digest (loandigest.net)
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