5 Dec 2023
The Reserve Bank of Australia (RBA) Board has decided to leave the cash rate unchanged at 4.35% in its December meeting.
December 2023 - Article provided by PSK's Chief Investment Officer Chris Lioutas.
The decision was expected given the rise at the last meeting and no new major economic news to warrant another move at this meeting.
Interesting that the Board felt the need to recap the rate increase at the November meeting by providing further clarity of their rationale, given some confusion post the change.
The only notable mention in this statement was wages growth picking up in the September quarter as expected, given the previous Fair Work Commission decision on award wages, with expectations that it won’t increase much further from here.
Other than that, the December statement was very consistent with the November statement, with the Board signing off with the usual commitment to returning inflation to target and that some further tightening of monetary policy might be necessary depending on data and the evolving assessment of risks.
It will be interesting to see how the December quarter evolves from a data perspective given clear bifurcation in the economy – ie. those doing well seem to have considerable buffers still, whilst those that may have over-stretched or were on the edge are seeing the end of any buffers they may have built.
Following their announcement, Australian equities rose, the AUD/USD fell, and Australian bond prices rose (yields lower), all very slight moves and as expected.
As always, if you have any questions or your personal circumstances have changed please do not hesitate to contact your financial adviser
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