Rates on hold but RBA adjusts their stance

 Rates On Hold But RBA Adjusts Their Stance As foreshadowed late last week, the RBA has abandoned their yield curve target, discontinuing their objective to keep the Australian government bond yield at 0.1%.  The other facets of monetary policy were held firm, with the RBA keeping the cash rate at 0.1% and continuing to purchase government securities at the rate of $4 billion per week until at least mid-February 2022.  According to the RBA, scrapping the yield target reflects improving economic conditions as well as a higher and earlier than expected inflation outcome – a reference to the 2.1% core inflation reading recorded over the year to September 2021. The RBA board has reiterated their stance that the cash rate won’t move higher until inflation is sustainably within their 2-3% target range, implying a requirement for tighter labour markets and a ‘material’ boost in wages growth before the inflation requirement is met.   Private sector economists are increasingl...