RBA rate pivot ‘perfectly sensible’: former Fed leader

is sensible policy that helps avoid excessive economic pain, says the US Federal Reserve’s recently retired vice chairman, Randal Quarles.in a move that surprised financial markets, which had been expecting a fifth half-percentage-point increase, and sparked the biggest sharemarket rally in two years.Dr Lowe said the pace of inflation was slowing, although it remained too high, and he expected it to peak at 7.75 per cent in Australia and fall back to 2 per cent - 3 per cent late in 2024.

Dr Lowe recently told a parliamentary hearing that Australia was “in a much better position” than America because “wages growth in Australia is still consistent with the inflation target. In the US it is not and that is a significant issue”. The US Federal Reserve has increased its rate by more than 3 percentage points since March to 3.25 per cent, while the RBA has increased the official cash rate by 2 ½ percentage points to 2.6 per cent in the same time frame.

Mr Quarles, who is founder and chairman of alternatives asset manager Cynosure Group and was once managing director of private equity giant The Carlyle Group, said he was confident the Fed will control the 40-year-high in inflation burdening US households and businesses.

If Fed took the lead from RBA then that will be the first where the tail wagging the dog 😜😜

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