I was one of the few not surprised by the RBA's raising of the cash rate by 25 basis points but I thought it stupid. ( I would have done 30!!)
It should have occurred last month and the pause starting this month. They then had the CPI result showing inflation peaking in the december quarter. monetary policy operates on a lag more so when there are a considerable number of people moving from fixed to floating rates this year.
Let us reiterate that the RBA was far too lax. A return to neutral rates should have happened long ago when the strong recovery from 'covid' recession was readily apparent.
No-one, financial markets, consumers, producers indeed anyone has any idea of what the RBA is doing at present because now they are all over the place.
The budget is next week and I think we should see a reduction of at least $ 10-15B in the structural deficit. anymore than this would guarantee a recession.
Lastly the Greens and others on the 'left' are asserting the main reason for inflation is companies boosting their profit margins. Thus far they have produced no evidence to support this assertion. I have yet to see it from our modest portfolio. Neither has the sharemarket either otherwise it would be booming and it aint
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