5 Jul 2022
RBA Update - July 2022
July 2022 - Article provided by PSK's Chief Investment Officer Chris Lioutas.
The Reserve Bank of Australia (RBA) Board increased the cash rate by 0.50% to 1.35% at its July meeting.
The move was expected as the Governor had previously flagged discussion around a 0.25% or 0.50% increase. Future moves will largely be dictated by quarterly inflation prints, with the June quarter inflation numbers to be released in the coming weeks and the RBA to update their forecasts next month. The RBA remains concerned regarding wage inflation spiralling out of control given tight labour market conditions.
Also on the Board's mind is a weakening of economic data more recently with consumer sentiment and confidence indicators taking a large hit whilst retail data holds strong for now and household saving rates remain high. The global outlook remains clouded by the war in Ukraine, covid in China, and pressure on real household incomes given higher costs and tightening of financial conditions.
The Board expects to take further steps in normalising monetary conditions over the months ahead, committed to doing what is necessary to ensure inflation returns to target (2-3%) over time.
We expect the RBA to raise rates by another 0.50% at their next meeting in August, with a slowdown in rate rises expected thereafter. But again, that path will be dictated by prevailing inflation data and broader economic conditions, particularly at the household level.
As always, if you have any questions or your personal circumstances have changed please do not hesitate to contact your financial adviser
PSK Financial Services Group Pty Ltd ABN 24 134 987 205 trading as PSK Private Wealth; is a Corporate Authorised Representative & Credit Representative of Charter Financial Planning Limited, ABN 35 002 976 294. This document contains information that is general in nature. It does not take into account theobjectives, financial situation or needs of any particular person. You need to consider you financial situation and needs before making any decisions based onthis information.
