Q3 CPI data suggest rates on hold till mid 2015 and macroprudential tools no more than rhetoric

Q3 CPI data suggest rates on hold till mid 2015 and macroprudential tools no more than rhetoric. Chris Caton, Chief Economist at BT Financial, says that despite a slight cooling in todays inflation figures the RBA will keep rates on hold before raising in mid 2015. With rates already set at record lows Caton says the RBA has taken a view that further cuts are unlikely to stimulate further economic activity. He also notes that recent commentary has focused on the rise of property investment loans providing another strong reason not to cut. To cool off the property sector Caton says the recent commentary from the RBA alluding to macroprudential measures should be enough to sufficiently cool off property investors, however, believes it is unlikely to result in direct intervention. On causes for concern - Caton notes Australia is the only developed economy with rising unemployment. We are yet to see other sectors other than housing construction pick up slack as the economy shifts away from the mining capex led activity.