Q1 CPI responses
Craig James at Commsec
- "we don't think there is a screaming need for interest rates to be cut on economic activity grounds"
- Low inflation "opens the door" for a cut "if they deem it is necessary"
- "The question is whether the Reserve Bank believes that cutting interest rates will actually provide a boost to the economy given that interest rates are already at generational lows."
(that's via the Australian Financial Review (may be gated))
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Also
JP Morgan:
- Expect a cut in May then again in August
- CPI is a game changer for the RBA
Westpac:
- Low inflation, on its own, is not a trigger for a rate cut
- A rate cut is dependent on local economic conditions demanding a rate cut
- With unemployment on a new downtrend this is not so at the moment and we suggest that the RBA is waiting to see a new weaker trend in domestic activity and employment before it would embark on such a strategy
AMP Capital chief economist Shane Oliver:
- CPI increases the pressure the RBA to cut
- Persists with his view the RBA to cut on coming months, says it may cut as early as next week
DB:
- RBA to remain on hold in May
- Statement to become more dovish