RBA Qtly Statement on Monetary Policy

The above named statement was issued on Friday. There has been a bit coming out of the RBA lately in the way of speeches and statements etc. Emphasis has been placed at each time on a "gradual" removal of the emergency stimulus levels. For instance from Friday's statement "The cash rate remains at a low level, and a further gradual lessening of monetary stimulus is likely to be required over time if the economy evolves as broadly as expected" . The statement talks about inflation as well and their prediction is for underlying inflation to fall back within their 2-3% band next year. They expect the easing in inflation to be gradual as well. The point is, there is no need for them to panic with respect to inflation. Lifting the cash rate by large amounts will spook consumers at a time at which it would be unwise to do so. Expect another 25 points in December therefore with a chance of a pause for a while. Depending of economic releases there's every chance though that they will slip a couple of rises in early next year.