So Mr Stevens, What Are You Waiting For?

Earlier this month, I discussed five reasons why the RBA ought to deliver more stimulus at the next Board meeting in November. The benign 3Q CPI print – which showed that core inflation remains entrenched at the bottom end of the central bank’s target range - confirms that the economy continues to suffer from deficient aggregate demand. The benign CPI also suggests that A$ depreciation of recent years hasn’t flowed through to higher retail prices; importers are clearly absorbing the lower dollar through lower profit margins . The central bank now has the smoking gun to deliver another rate cut on Melbourne Cup day; a positive narrative of persistently low inflation. (VIEW LINK)