As widely predicted, the RBA has today left the official cash rate on hold at 1.5 per cent.
Australia’s top economists were unanimous in predicting another hold, including ING Direct’s Michael Witts, who said there are no triggers in Australia that would require a move.
Others, like Saul Eslake, pointed to patterns in employment which will continue to inform the RBA’s decisions.
“Although most recently reported economic growth figures were above trend, and unemployment rate is 5 per cent - the level traditionally regarded as signifying full employment - the above trend growth is unlikely to be sustained in the near-term, the unemployment figure was probably rogue, there is still a lot of spare capacity in the labour market by other measures,” Mr Eslake said.
“The RBA itself has started to wonder out loud that unemployment probably needs to be lower for longer than history suggests before wages growth starts to pick up - and, most importantly of all, the latest CPI data show underlying inflation still running below the RBA's target range.”
How low can we go?
For some, like AMP Capital's chief economist Shane Oliver, rates might not see a hike until 2020.
"The fall in the official unemployment rate to 5 per cent helped by above trend economic growth is good news. But the slide in home prices in Sydney and Melbourne risks accelerating as banks tighten lending standards which in turn threatens consumer spending and wider economic growth and inflation and wages growth remain low. Against this backdrop it remains appropriate for the RBA to leave rates on hold," Mr Oliver said of today's decision.
More to come.