- We looked at what we found from the last meeting
- And they used that to ask the question whether the current policy situation is appropriate or not
- Most of the discussion was about the economic changes and the effect on inflation
- We have done some situational analysis of possible Trump policy changes
- It depends on what it says it will do and how other countries react to taxes
- It may not affect Australia very much but it could affect us if there is an effect on China
- We are still waiting and seeing the mode though
- The point of today's report is to let people know that we have noticed the changes in the data
- We need to be aware of what next month's data means for the inflation outlook ahead of the February meeting
Bullock insists that core inflation is still too high but at the same time when she was asked about rate cuts in the short term, she didn't completely dismiss that idea either. She simply insisted that they continue to look at the data and evaluate their opinions accordingly based on that.
Traders are now pricing in ~56% of a 25 bps rate cut for February next year. But if the data continues to worsen ahead of that, expect markets to raise prices and put more pressure on the Aussie currency.
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