Tuesday, December 6, 2011

Inflation continues to head south according to private gauge - another reason for the RBA to cut rates?

A private gauge on inflation released on Monday would have given the Reserve Bank another reason to cut interest rates.

A closely watched private measure by TD Securities and the Melbourne Institute put annualised inflation at 2.1 percent - right at the bottom of the central bank's target band of two to three percent over time.

In addition to the deteriorating situation in Europe, more comfort about inflation could be a rate cut trigger.

Here's my analysis from Monday's edition of The World Today.

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