Response to RBA Statement on Monetary Policy, and what now from the Bank

Westpac have a note out on the Reserve Bank of Australia SoMp earlier

Post is here:

• RBA says no strong case for a near term change in cash rate

The Westpac response is detailed, but their summary in brief:

• On face value, the stronger growth and higher inflation forecasts might imply that the RBA is closer to raising rates than we have expected. That may well be the case from their perspective. But if the economy evolves as we expect with a slowdown in consumer spending, a contraction in residential investment, and softer confidence partly linked to global uncertainty, the RBA's growth and inflation forecasts are unlikely to be achieved.
• Of course, it will take some time for these developments to be apparent and based on the Governor's comment "the Board does not see a strong case to adjust the cash rate in the near-term", we have ample time for the outlook to evolve without a surprise policy adjustment based on these forecasts.

And, for where to now says the bank (now and forever by the look of it …):

• Westpac confirms its view that the cash rate will remain on hold through 2018, 2019 and 2020.