Reserve Bank of Australia Deputy Governor Michele Bullock spoke yesterday.

The main message of note from her was that the RBA 'on hold' interest-rate hike pause at the April meeting was about job preservation and policy lags — rather than a response to banking turmoil.

• We would have paused on rates even without global banking stress.
• Rates are in restrictive territory, we can stop for a minute and watch.
• Want to get inflation down and keep progress made on employment.
• No sign domestic banks are tightening lending due to global stress.

More detail (via WSJ, gated)

• “Even before the problems with Silicon Valley Bank we had already suggested that we were thinking about pausing because we had moved by 350 basis points in quick time,”
• “Now what we observe is that we are in restrictive territory, because we’re starting to see signs (of a slowdown) in the housing market, consumption, retail sales,”
• “Now it’s time to just stop for a minute and watch.”

---

Also, a guilty admission on the horrible guidance given back in 2021:

• For most of 2021, the RBA issued the same repeated assurance: “The Board will not increase the cash rate until actual inflation is sustainably within the 2 to 3 per cent target range. For this to occur, wages growth will have to be materially higher than it is currently. This will require significant gains in employment and a return to a tight labour market. The Board does not expect these conditions to be met until 2024 at the earliest.”

Bullock said messaging was “garbled”. Fellow Board member Harper cowered behind the hindsight defence:

• “with the benefit of hindsight … it looks like we did a terrible job”.

Such weasel words. Even a humble spot monkey like me lambasted that arrogant, conceited call at the time:

• The RBA says it won't be hiking the cash rate for three years. As if.

This article was written by Eamonn Sheridan at www.forexlive.com.

from Forexlive RSS Breaking News Feed https://ift.tt/d0FlYX9