See the world through the eyes of an economist.
Rate Cuts are Go!
Bond markets are currently pricing a 93% chance of a rate cut at next week’s RBA Board meeting. Sounds about right.
… especially since the war on inflation has largely been run. This chart from CBA shows that when you focus in on recent inflation results, Australia is doing well. Looking at the last six months (and annualising the number), inflation is running at 2.7% – well inside the RBA’s 2-3% target band. And just looking at the last quarter it’s just 2%.
Housing is still too hard!
The dwelling approvals data came in week again in December. Australia just approved 15,378 homes in the month, well below the 20,000 run rate required to hit the government’s target.
For calendar year 2024, we approved just 170,719 homes – 40% below the government’s annual target. Housing is just too hard.
But in a tiny piece of good news, construction costs are finally coming down, after running rampant for several years post-Covid. New housing construction costs for detached housing fell a tiny bit in the December quarter CPI data.
Less cash, less robberies?
Finally, I thought this chart was interesting. There’s been a long-run decline in bank robberies in America. There were around 10,000 a year in 1990. Last year there were just 1300. That’s still a lot, but I wonder if the decreased use of cash in transactions is having an impact here. How much cash are you going to get out of your local bank branch these days anyway.
And that’s how the world looked through the eyes of an economist this week.
DB.