NAB Morning Call
RBA easing slowly. More cuts “no lay-down misère”
Feb 18, 2025
Taylor Nugent, NAB’s expert on monetary policy, breaks down the recent RBA rate cut and its surprising cautious outlook for future cuts. He discusses how investor sentiment is shifting with the latest employment data from the UK and inflation trends in Canada. The conversation also touches on global geopolitical dynamics, including US-Russia talks and Europe’s push for a unified defense strategy. Insightful, timely, and full of economic intrigue, this discussion is a must-listen for anyone following market movements.
17:28
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Quick takeaways
- The RBA's cautious approach to rate cuts suggests that further reductions will depend on clear evidence of inflation progress.
- UK employment stability amidst economic concerns highlights the challenges faced by the government regarding potential payroll tax hikes and growth.
Deep dives
Reserve Bank of Australia Rate Cut Analysis
The Reserve Bank of Australia (RBA) recently implemented a 25 basis point cut to the cash rate, signaling a cautious approach moving forward. Despite the cut, there are indications that additional reductions may not follow closely, as the RBA highlighted the need for continued evidence of inflation progress before making further changes. RBA Governor Michelle Bullock's comments during the press conference projected an unexpectedly hawkish stance, suggesting that the current sentiment may not support a series of cuts as some market participants anticipated. As a result, while the RBA's forecasts include the possibility of multiple future cuts, any actions will be gradual and highly dependent on forthcoming data.
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