What economic indicators go into the RBA cash rate decision? With keynote speaker Mark Bouris.

Upscaled Property attended YP City Leaders Forum at the Gold Coast convention center. The keynote speaker for the event was Mark Bouris, executive chairman of Yellow Brick Road Group.

It was timely that one of the topics of interest that Mark spoke about was the 12 economic indicators and factors that impact the RBA’s decision with the cash rate.

Photo Credit: Novasoma

Mark dived deeper in the 3 economic indicators that he says are “weighted” the highest to factor in when they make their decision.

1. GDP
   

2. Inflation Inflation for the September quarter went up 1.2% compared to 0.8% in the June quarter. CPI inflation remains above 5 per cent in year-ended terms – well above the Bank’s inflation target of 2–3 per cent.
   

3. Labour Market

With the Reserve Bank Board Meeting and Monetary Policy Decision on the 7th November 2023. The data that the RBA board reviews to make their decision is released to the public by the ABS (Bureau of statistics.) After the cash rate remaining the same for four consecutive months, the cash rate went up from 4.10% to 4.35%.

This increase doesn't come as a surprise as nearly 90%, 34 of 39 economists forecasted that the RBA would raise its official cash rate (AUCBIR=ECI) 25 basis points to 4.35% on Nov. 7th. In addition to this all four major banks response was that they expect the RBA to hike rates by 25 basis points.

Click below for a market update by Mark Bouris & Stephen Koukoulas

Previous cash rate changes

• 0.35% - 4th May 2022

• 0.85% - 8th June 2022 *raised 50 basis points

• 1.35% - 6th July 2022 *raised 50 basis points

• 1.85% - 3rd August 2022 *raised 50 basis points

• 2.35% - 6th September 2022 *raised 50 basis points

• 2.60% - 4th October 2022 *raised 25 basis points

• 2.85% - 1st November 2022 *raised 25 basis points

• 3.1% - 6th December 2022 *raised 25 basis points

• 3.35% - 7th February 2023 *raised 25 basis points

• 3.6% - 7th March 2023 *raised 25 basis points

• 3.85% - 4th April 2023 *raised 25 basis points

• 3.85% - 2nd May 2023

• 4.10% - 6th June 2023 *raised 25 basis points

• 4.10% - 4th July 2023

• 4.10% - 1st August 2023

• 4.10% - 4th September 2023

• 4.10% - 3rd October 2023

• 4.35% - 7th November 2023 *raised 25 basis points

The other economic factors that go into the decision include:

• Wage - wage growth index

• International economy

• House Prices - core logic month on month increases for Australia wide

• Retail sales

• Consumer Sentiment

• Building approvals

• Business investment

• Business Confidence

• Commodity prices

• Commodities

• Stocks

• Current rates