isn't that how Macquarie justify their "come as you are served" rates?
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As you know, the cash rate is currently 3.75 per cent. This is still 50 basis points below the previous cyclical low of 4.25 per cent in 2001. On the surface this might suggest that the cash rate is still unusually low. However, with other interest rates in the economy having risen by at least 100 basis points relative to the cash rate over the past couple of years, they are now above their previous cyclical lows.
...
Taking these considerations into account, it would be reasonable to conclude that the overall stance of monetary policy is now back in the normal range, though in the expansionary segment of that range.
The appropriateness of this will be monitored by the Reserve Bank over the months ahead in the light of the data becoming available on economic activity and inflation.
Today the RBA gave a speech about Bank Funding.
Their concluding paragraphs intimated that their neutral band had been reached, which implies that there may be a pause in IR rises.....
... followed with the disclaimer that this could change if other things change .
http://kineticsglobal.com/economist/sites/default/files/PriceActionRBAJumpedGun161209.pdf
GDP too soft for current cash rate - i call either
a) mistake in raising or
b) mistake in raising or
c) mismanagement or
d) shot across the bow (political stunt) or
e) mistake in raising.
The Reserve Bank has shocked financial markets after saying its interest rate settings are now back to a ‘‘normal range’’, following recent rises in commercial bank deposit, housing and business lending rates.
RBA deputy governor Ric Battellino also said if interest rates in the broader economy are rising relative to the central bank’s official cash rate ‘‘there is less need for the cash rate to rise’’.
Striking an unexpectedly dovish note, the Reserve Bank of Australia's Deputy Governor Ric Battellino today said overall monetary policy stance was back in the normal range as interest rates in the economy have outpaced rises in the official cash rate.
For sure Peter - 2011 will either be boom or bust.
and my view is shifting from bull to knife-edge.
For sure Peter - 2011 will either be boom or bust.
and my view is shifting from bull to knife-edge.