But that is no longer the case after such a prolonged and significant increase. |
But we aren't in charge of the policy lever. |
Capacity pressures remain tight, |
Fundamentally, we believe that at this point in the cycle, after one year of sub-trend growth and facing the prospect of one to two more years of the same, and with inflation peaking, the bank shouldn't be tightening policy further, |
Inflation is going to remain in the top half of the target range and (it's) all very consistent with monetary policy needing to remain relatively tight for some time, |
It was obviously a technical bounce after a very weak run, which was always the risk. |
One more rate hike late this month is a sure thing, but further tightening is data dependent. |
We have pushed out the timing of the monetary policy easing to June and reduced the cumulative amount through 2006 to 75 basis points. |
We're still looking for an easing later this year. |
With the economy growing below potential, labor market indicators probably continued to ease. The survey should be relatively friendly for those expecting easier monetary policy later in the year. |