01/02/2022
We finance nuts love reading the Reserve Bank Media Release from Philip Lowe. Today's media release contains tidbits like:
* The Omicron outbreak has affected the economy, but it has not derailed the economic recovery.
* The RBA's central forecast is for GDP growth of around 4¼ per cent over 2022 and 2 per cent over 2023.
* The RBA's central forecast is for the unemployment rate to fall to below 4 per cent later in the year and to be around 3¾ per cent at the end of 2023.
* A further pick-up in wages growth is expected as the labour market tightens. This pick-up is still expected to be only gradual, although there is uncertainty about the behaviour of wages at historically low levels of unemployment.
*Inflation has picked up more quickly than the RBA had expected, but remains lower than in many other countries. The headline CPI inflation rate is 3.5 per cent and is being affected by higher petrol prices, higher prices for newly constructed homes and the disruptions to global supply chains. In underlying terms, inflation is 2.6 per cent.
If you are an investor and have a tiny bit of interest in economics, do yourself a favour and read the whole thing to get a feel for the state of the economy in Australia. It only takes 5 minutes and you'll be all the more knowledgeable for it.
At its meeting today, the Board decided to maintain the cash rate target at 10 basis points and the interest rate on Exchange Settlement balances at zero per cent. It also decided to cease further purchases under the bond purchase program, with the final purchases to take place on 10 February.
