Latest news with #consumerprice
ABC News
2 days ago
- Business
- ABC News
Did the RBA misfire with its decision to hold rates this month?
What do you get when inflation falls at the same time unemployment is rising? Rate cuts, that's what. In fact, the interest rate cut we should have seen a few weeks ago has now become a certainty for the next Reserve Bank of Australia meeting next month. At the shock post-meeting press conference, RBA governor Michele Bullock made it clear the board was awaiting confirmation that inflation was in decline, reiterating that it didn't want to act prematurely, only to discover that it had to resume the inflation fight later on. Those fears were allayed on Wednesday when the June quarter inflation data confirmed consumer price rises decelerated to 2.7 per cent during the three-month period, well down from the 2.9 per cent rise in the March quarter. That's for underlying inflation, the measure that strips out influences like government support measures such as rent assistance and power bill subsidies. On a headline basis, inflation has dropped to just 2.1 per cent, at the very bottom end of the RBA's comfort zone between 2 and 3 per cent. For most of this year, the newly introduced monthly inflation figures have been pointing towards a slowdown in the pace of consumer price rises. But the RBA remains anchored to the traditional quarterly numbers that, to be fair, have a far more comprehensive data set upon which to make interest rate decisions. There's a chorus of "I told you so" that would answer in the affirmative. But given there are only a few weeks between the July and August meetings, it shouldn't make that much difference, apart from the bruised egos of those who confidently, but wrongly, predicted a cut this month, your correspondent included. One of those was Luci Ellis, until recently a formidable part of the RBA brains trust, before last year joining Westpac as chief economist. "The five-week difference isn't really such a big deal. So, we wouldn't regard them as being particularly behind the eight ball with this decision, assuming they do actually go forward with a rate cut next month," she told Kirstin Aitken on The Business. Holding rates again, however, could create problems. "Because (monetary) policy operates on the economy with a lag, you actually kind of need to already be there, so there's not really a good argument for a continued hold." This month's decision to keep interest rates unchanged wrong-footed financial markets, which again are pricing in an almost certainty that rates will be cut next month. Markets and economists were convinced that the most recent GDP figures, delivered before this month's meeting and which highlighted a barely expanding economy, in conjunction with declining monthly inflation figures, were a compelling enough reason for a cut. The data since has only added weight to that argument. Unemployment has jumped from 4.1 per cent, where it has been steady for almost a year and a half, to 4.3 per cent as the labour market has softened. The number of people applying for jobs hit a new record last month, indicating a loosening in the job market. Even the handful who didn't believe there was a compelling reason for a rate cut this month were swayed by the latest inflation data, Betashares' David Bassanese said the broad-based easing in goods, services, and housing-related inflation set the scene for an August rate cut. But he defended the RBA's decision to hold fast this month, as the less reliable monthly figures indicated underlying inflation would fall at a much faster clip than occurred. "It turns out the governor was right to be cautious with annual trimmed mean inflation in the quarterly CPI report of 2.7 per cent, notably higher than what the May monthly report had suggested." The focus now is on how much further rates will be cut after this month. "My base case remains that the RBA will cut rates in August and then again in November and February," he said. Luci Ellis is also tipping an August and November cut. But she also thinks the RBA may be undershooting on where it believes interest rates will settle, given it believes inflation will fall further than the RBA currently is forecasting. "We think there are two more rate cuts after that, assuming our forecasts for inflation are what turns out to be the actual," she said. But she's confident about her forecasts. "Their favoured measure of underlying inflation is flat as a pancake at 2.6 per cent a year for, you know, the entire period they were forecasting. "And we just think it's going to land somewhere in the low twos through the next year." A few weeks back, the RBA governor assured the nation that rate cuts were a matter of when rather than if. That's rapidly shifting to a question of how many.
CNA
23-07-2025
- Business
- CNA
Singapore's core inflation rises 0.6% in June, lower than poll forecast
SINGAPORE: Singapore's key consumer price gauge rose 0.6 per cent in June from a year earlier, official data showed on Wednesday (Jul 23), lower than economists' forecasts. The core inflation rate, which excludes private road transport and accommodation costs, compared with a forecast of 0.7 per cent in a Reuters poll of economists. Higher inflation in retail and other goods was offset by lower inflation in all other major core consumer price index categories, said the Monetary Authority of Singapore (MAS) and Ministry of Trade and Industry (MTI). The core inflation rate in June was identical to that in May. Meanwhile, headline inflation was 0.8 per cent in annual terms in June, lower than economists' forecast of 0.9 per cent. It was also unchanged from May. Apart from core inflation remaining unchanged, higher transport inflation was offset by lower accommodation inflation, said MAS and MTI. MAS and MTI expect Singapore's imported inflation to remain "moderate" as global crude oil prices have eased and food commodity price increases should remain contained. "Although the ongoing trade conflicts could be inflationary for some economies, their impact on Singapore's import prices is likely to be offset by the disinflationary drags exerted by weaker global demand," they said. Domestically, unit labour costs are "projected to rise gradually" as nominal wage growth continues to ease, even as productivity increases. Enhanced government subsidies for essential services such as public healthcare, preschool education and public transport will also continue to dampen services inflation, according to MAS and MTI.
Reuters
23-07-2025
- Business
- Reuters
Singapore's core inflation rises 0.6% y/y in June, lower than poll forecast
SINGAPORE, July 23 (Reuters) - Singapore's key consumer price gauge rose 0.6% in June from a year earlier, official data showed on Wednesday, lower than economists' forecasts. The core inflation rate, which excludes private road transport and accommodation costs, compared with a forecast of 0.7% in a Reuters poll of economists. Headline inflation was 0.8% in annual terms in June, lower than economists' forecast of 0.9%. The data was released a week ahead of the Monetary Authority of Singapore's review of its policy settings on July 30. EToro market analyst Josh Gilbert said the softer-than-expected inflation rate adds weight to expectations that the central bank will loosen monetary policy. "With growth still sluggish and inflation now well contained, it will be harder for MAS to justify holding policy steady, and today's data strengthens that argument," he said. At the previous review in April, the MAS loosened monetary policy for the second time this year, and downgraded its economic growth forecast for 2025 to 0% to 2%. It also reduced its forecasts for both core and headline inflation this year to 0.5% to 1.5%.
Reuters
16-07-2025
- Business
- Reuters
Morning Bid: Tariff imprint in US consumer price data
A look at the day ahead in European and global markets from Kevin Buckland The investing world will be watching U.S. factory inflation on Wednesday, after consumer price data pulled Wall Street back from all-time highs overnight, with Fed predictions of tariff-induced inflationary effects starting to be realized. Both the S&P 500 (.SPX), opens new tab and Nasdaq (.IXIC), opens new tab - and by extension, MSCI's world equities index (.MIWD00000PUS), opens new tab - retreated from record peaks after traders shaved back bets of U.S. rate cuts this year as prices rose for things such as coffee and couches, while staying steady for tariff-exempted (for now) items such as cars. That swung the spotlight squarely onto producer price data due later today, which could reveal an even bigger building of price pressures, because businesses may still be holding back on passing higher costs to consumers. This validates Fed Chair Jay Powell's repeated assertion that an expected emergence of tariff-led inflation uptick this summer is cause to hold off on further interest rate cuts for now. Traders were listening, trimming back bets to 43 basis points of cuts over the rest of the year, from closer to 50 basis points earlier in the week. President Donald Trump's reading of the data was different though, as he took to his Truth Social platform to post, "Consumer Prices LOW. Bring down the Fed Rate, NOW!!!" Trump has repeatedly railed against the Fed for not cutting rates, even calling for Powell's resignation, which has fuelled concerns that the U.S. President aims to put the Fed under his thumb. Powell's tenure ends in May next year, but he has a seat on the Board of Governors until January 2028. Trump said Tuesday that Treasury Secretary Scott Bessent could be a candidate to replace Powell, but "because I like the job he's doing" currently, he may not end up as a contender. Bessent, meanwhile, said in an interview on Bloomberg Surveillance that a "formal process" is already starting to identify the next Fed Chair. As if that wasn't enough to keep investors busy, the U.S. earnings season has also just gotten underway. JPMorgan Chase (JPM.N), opens new tab and Citigroup (C.N), opens new tab beat expectations on Tuesday, but were met with a mixed market response. Bank earnings due Wednesday include Goldman Sachs, Morgan Stanley and Bank of America, while Johnson & Johnson will give more of a snapshot of how consumers are faring. The corporate calendar by contrast is relatively quiet in Europe, where stock futures are pointing to a mixed open, and Britain's FTSE (.FTSE), opens new tab reopens after hitting an all-time peak on Tuesday only to then end the day down 0.7%, its biggest fall since post-"Liberation Day" tariff turmoil in early April. The main event will be UK consumer price data, with the consensus among economists for headline inflation to hold steady at 3.4%. Bank of England policymaker Catherine Mann said on Tuesday that inflation pressures remained a challenge despite a fall in the pace of pay growth in recent months. Key developments that could influence markets on Wednesday: - UK consumer price index (CPI) for June. - U.S. earnings: Morgan Stanley, Goldman Sachs, Bank of America, Johnson & Johnson. - U.S. industrial production, producer price index (PPI). - U.S. Federal Reserve officials speaking, including Governor Michael Barr. Trying to keep up with the latest tariff news? Our new daily news digest offers a rundown of the top market-moving headlines impacting global trade. Sign up for Tariff Watch here.
Yahoo
10-06-2025
- Business
- Yahoo
The 10-Year Auction and Inflation Data Could Jolt the Bond Market
Inflation data followed by a hotly watched auction of a 10-year debt could awaken a sleepy bond market on Wednesday. The Treasury market has been in a holding pattern. Against this backdrop comes the consumer price data Wednesday morning followed by the sale of $39 billion worth of 10-year debt at 1 p.m. Eastern—both hold the potential to jolt yields.
