|
|
|
|
Hedge Clippings | 14 February 2025 The RBA has (not surprisingly) kept a very low profile for the last few weeks, not wanting to give any hint as to their thinking prior to the monetary policy announcement due at 2:30 next Tuesday. Not so every other politician, economist, or market observer, with the Treasurer leading the charge, extolling the government's track record, and putting pressure on Governor Michele Bullock and her colleagues, while also trying to claim that he's not doing just that. The market, and most economists, are pretty well convinced that the RBA will start the ball rolling next week (although they're by no means unanimous), citing the latest CPI result of 2.4%, well within the RBA's target range. Those going against the flow note that the RBA prefers the trimmed mean CPI number of 3.2%, which of course excludes electricity, which without generous government rebates both Federal and State, would have risen 0.2% in the December quarter, rather than falling 9.9%, and 25.2% over the year. While voters might be fooled, the RBA well understands that these are temporary handouts and don't want to jump the gun too soon. Also on the negative side is the noise coming out of the US Federal Reserve, with US inflation rising more than market expectations, up 3.3% excluding volatile food and energy prices, leading to doubts about further cuts in the US. Added to Jerome Powell's concerns will be the inflationary effects of Trump's policies, whether it be widespread tariffs, or the mass deportation of low cost illegal immigrants driving up labour prices. Although Trump's policies are unlikely to have an inflationary effect in Australia - although they could arguably prove deflationary depending on how the Tariff Wars all play out - the RBA is likely to be keeping a careful watch on the global knock-on effects of the Donald Show, Series II. Whatever the outcome, Tuesday's decision will be hailed by one side of politics or the other as vindication of either their policy, or opposition thereto. By chance, this week we were reminded of the late, great Robin Williams, who in his 2006 film "Man of the Year", said "Remember this ladies and gentlemen: It's an old phrase, basically anonymous, politicians are a lot like nappies, they should be changed frequently, and for the same reasons. Keep that in mind the next time you vote." Which co-incidentally, won't be too far away. News & Insights Quarterly State of Trend Report - Q4 2024 | East Coast Capital Management Staying grounded | Insync Fund Managers January 2025 Performance News Bennelong Concentrated Australian Equities Fund Skerryvore Global Emerging Markets All-Cap Equity Fund Glenmore Australian Equities Fund |
|
|
If you'd like to receive Hedge Clippings direct to your inbox each Friday |
