Its Over

.....calling TINA, are you still out there?

.....Powell is more resolute and hawkish to make up for his 'inflation is transitory' having been behind the curve earlier, Lowe is shy and dovish because he suggested rates weren't rising until 2024. Are their judgment clouded by prior positions?
Reserve Bank delivers 3.1pc Christmas cash rate
Ronald MizenEconomics correspondent
Dec 6, 2022 – 2.36pm

The Reserve Bank of Australia announced an eighth straight increase in the official interest rate after its final meeting for 2022, delivering an unwelcome quarter-point rise ahead of the expensive Christmas season.
The increase was on par with financial market expectations, and takes the overnight cash rate from 0.1 per cent to 3.1 per cent in just seven months, the highest level in a decade and the fastest tightening cycle in a generation.

At 3.1 per cent, monthly repayments on a 25-year, $500,000 mortgage will have increased by $834 since May, $1251 for a $750,000 mortgage, and $1668 for a $1 million loan, according to comparison website RateCity.

RBA governor Philip Lowe said the board expected to increase interest rates “over the period ahead” but would be guided by fresh economic data.

“It is closely monitoring the global economy, household spending and wage and price-setting behaviour,” Dr Lowe said, but emphasised at 6.9 per cent in the year to October 31 and forecast to grow to 8 per cent by year’s end, headline inflation was still far too high above the 2–3 per cent target band.

“The size and timing of future interest rate increases will continue to be determined by the incoming data and the board’s assessment of the outlook for inflation and the labour market.

“The board remains resolute in its determination to return inflation to target and will do what is necessary to achieve that.”

Dr Lowe’s usual most-meeting statement gave no indication whether the board considered a pause in rate rises, which many economists believed would have been part of the discussion.

The governor acknowledged the substantial cumulative increase in interest rates since May, which he said was necessary to ensure the current period of high inflation was only temporary.

But he also talked up recent wages September quarter wages growth and a further pickup being expected, and the need for the bank to pay close attention to avoid a “prices-wages spiral.”

Average private sector pay rises hit 4.3 per cent in the September quarter as wages grew at the fastest pace in a decade. Overall wage growth picked up 1 per cent over the quarter to 3.1 per cent through the year.

“Household spending is expected to slow over the period ahead although the timing and extent of this slowdown is uncertain,” Dr Lowe said. “Another source of uncertainty is the outlook for the global economy.

“The Board is seeking to keep the economy on an even keel as it returns inflation to target, but these uncertainties mean that there are a range of potential scenarios. The path to achieving the needed decline in inflation and achieving a soft landing for the economy remains a narrow one.”