Another year of record low rates

Despite the strengthening of the activity data, the Reserve Bank of Australia won’t raise interest rates from 1.5% at the meeting on Tuesday 6th February and probably won’t hint in the following Friday’s Statement on Monetary Policy that rate hikes are just around the corner either. The rising Australian dollar has already tightened financial conditions and the outlook for inflation is still weak. Our money is on the RBA leaving interest rates at 1.5% at all eleven policy meetings this year.