A top economist has exposed clashing views behind the Reserve Bank of Australia\u2019s latest cash rate hike as tensions emerge over the central bank\u2019s pre-meeting signals.<\/p>\n
The RBA earlier this month voted 6-3 in favour of lifting the cash rate for the fifth time this year to 4.85 per cent.<\/p>\n
It followed RBA deputy governor Andew Hauser signalling the bank was likely to hike in November, stirring concerns from the external members of the nine-person board, according to The AFR<\/a>.<\/p>\n Westpac\u2019s chief economist Luci Ellis, who maintains the RBA will not hike again this cycle, voiced concern about the RBA being \u201cdownbeat\u201d on productivity, employment participation and population growth.<\/p>\n \u201cEach of those individual judgements is a reasonable judgement but when you put them all together you end up being sort of well below what we would think of as a better estimate of trend growth and supply capacity,\u201d Ms Ellis told Business Weekend.<\/p>\n \u201cWe think that at least some of the external board members would be closer to our view.\u201d<\/p>\n She added the RBA would be considering a hike in February but stressed there was not a case to increase the cash rate then.<\/p>\n \u201cI just don’t think that the facts on the ground will support it by that stage, but I do still think there will be people calling for it,\u201d Ms Ellis said.<\/p>\n \u201cI’m quite certain there will be voices outside the Reserve Bank calling for it, there always are and so in that respect it will still be part of the conversation.<\/p>\n \u201cBut based on what’s happened between the meeting and now, we’re more confident that in the end (the RBA is) done.\u201d<\/p>\n After lifting the cash this month, RBA governor Michele Bullock acknowledged concerns about Mr Hauser\u2019s comments in the lead up to the meeting.<\/p>\n \u201cA lot of people interpreted our communication strategy as to go out and massage the market to where we want things to go,” Ms Bullock told reporters.<\/p>\n \u201cOne thing I want to be absolutely clear about here: I don\u2019t make the decisions. Andrew Hauser does not make the decisions.<\/p>\n \u201cThis is a board decision, and you know the idea that there might be a strategy as information comes out for me to go and sort of nudge, nudge, wink, wink to the market, this is what we might do \u2013 that would be entirely inappropriate.\u201d<\/p>\n The recent hike comes as inflation remains outside the central bank\u2019s 2-3 per cent target band at 4.3 per cent.<\/p>\n Trimmed mean inflation \u2013 the RBA\u2019s preferred measure that analyses the middle 70 per cent of price changes \u2013 remains at 3.6 per cent.<\/p>\n This inflation measure has sat mostly outside the central bank\u2019s target band for about five years.<\/p>\n Australians will gain a better understanding of the RBA\u2019s latest decision when the minutes from the board meeting are made public on November 17.<\/p>\n Meanwhile, the next rate call will be handed down on December 8.<\/p>\n Read related topics:Inflation<\/a>Interest Rates <\/a><\/p>\n","protected":false},"excerpt":{"rendered":"A top economist has exposed clashing views behind the Reserve Bank of Australia\u2019s latest cash rate hike 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