FEAR & GREED | Business News The Week Ahead | 31 March 2025
Mar 30, 2025
The hosts dive into the Reserve Bank of Australia's upcoming decisions on interest rates and the implications of last week's federal budget. They discuss the labor market's tightness and its influence on wage growth, hinting at a potential rate cut. Retail sales and household spending trends are examined as key indicators of consumer behavior. As elections loom, there's emphasis on the need for economic reforms and the recovery in house prices, highlighting the dynamic interplay of these factors in shaping the economy.
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Unexciting Budget
- The federal budget was unexciting, which can be positive for economic policy.
- Exciting policy often has a higher chance of being bad policy.
Inflation Within Target Band
- The headline inflation rate was 2.4% annually, and the trimmed mean was 2.7%.
- These figures are within the target band, suggesting the RBA should consider a rate cut.
RBA's Hesitation on Rate Cuts
- Despite inflation being within the target band, the RBA might be hesitant to cut rates due to labor market tightness.
- Concerns remain about potential wage spikes with further growth.