\u201clittle room\u201d for future rate cuts<\/a>.<\/p>\nSky News Business Editor Ross Greenwood said Westpac\u2019s survey showed why the nation\u2019s central bank had concerns about demand outpacing supply.<\/p>\n
\u201cThe reason why this is important right now is because what the Reserve Bank is watching for is signs of consumer activity,\u201d he said on Business Now.<\/p>\n
\u201cThe problem is if consumers get too active it pushes up inflation which means no interest rate cuts – not any time soon.\u201d<\/p>\n
Westpac\u2019s head of Australian macro-forecasting Matthew Hassan said the rise of consumer sentiment seemed to have outweighed renewed concerns about inflation and interest rates.<\/p>\n
\u201cHigher than expected \u2018partial\u2019 inflation reads had clearly unsettled consumers in previous months,\u201d Mr Hassan said in the consumer sentiment report.<\/p>\n
\u201cOrdinarily, the surprisingly strong September quarter CPI, released in late October, and the Reserve Bank\u2019s decision to leave the cash rate on hold at its November meeting would have been expected to have added to these concerns.<\/p>\n
\u201cThese negatives appear to have been less pervasive in November.\u201d<\/p>\n
He added the RBA\u2019s decision to hold interest rates last week seemed to have less impact on consumer sentiment than expected after soft warnings from the central bank.<\/p>\n
\u201cThe Bank could have sent a more hawkish message on inflation than it did,\u201d Mr Hassan said.<\/p>\n
\u201cInstead, it assessed that some of the recent rise was due to temporary factors.<\/p>\n
\u201cThe Governor also revealed that the RBA had not considered raising the cash rate at the November meeting.\u201d<\/p>\n
The publication of the report follows RBA deputy governor Andrew Hauser warning the economy faces capacity constraints.<\/p>\n
This means inflation could start to surge as demand outpaces supply.<\/p>\n
Money markets are pricing in the next move of interest rates to be down, although the odds of this happening do not exceed 50 per cent until June 2026.<\/p>\n","protected":false},"excerpt":{"rendered":"A fresh report has shown Aussie shoppers are feeling more optimistic, although this could spell trouble for those…\n","protected":false},"author":2,"featured_media":278761,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[64,63,99,5938,164,5465,5626,161573,161572,8420],"class_list":["post-278760","post","type-post","status-publish","format-standard","has-post-thumbnail","category-economy","tag-au","tag-australia","tag-business","tag-consumer-sentiment","tag-economy","tag-inflation","tag-interest-rates","tag-matthew-hassan","tag-ross-greenwood","tag-westpac"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts\/278760","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/comments?post=278760"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts\/278760\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/media\/278761"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/media?parent=278760"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/categories?post=278760"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/tags?post=278760"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}