Inflation running at 4.5% for the full year. Who really believes that? Will keep running at a high level for a while yet , oil coming down,European economies slowing down, USA heavily in running scared and panic mode, hand on the lever to do whatever it takes particularly in the middle of elections, one wonders how much pressure is going on behind the scenes to bring oil down, America usually goes to war for less, gold can't get a leg up to where it should be if inflation is such a fear.
All the indicators are there that we will not be able to be the only ones riding this out without quickly cutting rates to keep things on the boil. NZ dropping rates. When will we ? With the amount of money running off the USA presses we can't afford to have our dollar being excessively high vis a vis the US. Despite the RBA 's mandate , these are extraordinary times and expect extraordinary tactics to improve SENTIMENT and not fundamentals. Rates are coming down in my opinion -Australia just can't afford the alternative.
We had a similar pattern emerge in the 90's - not the same granted but the pressure is to go down particularly with the independent actions of the Banks upping the ante with the RBA . RBA is supposed to be independent I know - but I don't believe that to be the case if it warrants otherwise in the national interest.
