Supposedly, according to Trump, he decided to pause given that U.S. bond yields were looking a little too tasty. (That’s a problem because the higher a bond yield goes, the fewer people are buying them.)

In between the lines: Investors weren’t feeling so confident about the safety of the U.S. Government, with trust and confidence issues unsettled by weeks of flip-flopping on tariff decisions largely responsible.

(Many analysts are wondering whether or not China has been dumping U.S. Treasuries in an apparent bid to hurt the American economy.)

Regardless of whether or not that’s true (or more importantly, to what extent it’s true,) with the debt profile America currently has, the Trump Administration has no interest in its bonds being unattractive.

Thus the 90-day tariff pause. At least that’s a normal, non-bodacious and understandable governance decision. You could even call it prudent, which doesn’t appear to be Trump’s favourite approach.

So Trump has yielded to market pressure, sort of. Blanket 10% tariffs still remain; so auto tariffs, and Trump’s administration this week flagged via multiple mouthpieces tariffs on pharmaceuticals are coming.

In the background we’re still waiting for copper tariffs to hit, which Commerce Secretary Howard Lutnick has suggested are going to happen, and automakers aren’t happy that auto tariffs were excluded from the 90-day reprieve.

U.S. futures as of Thursday suggest maybe the market got too excited overnight.

As of the Aussie arvo, U.S. futures are in the red – though, under 1% for major indexes.

What is interesting is despite this apparent relief and broad reallocation back into equities, the price of gold has started shooting back up on Thursday, in what appears to be a contrarian run on safe-haven assets at the same time the market bounces back.

What does that point to? In my mind, uncertainty. The fact both risk assets and safe-haven assets are rising in tandem says a lot – and it’s worth considering too gold has travelled upward as U.S. futures dip back into the red.

I’m not going to try and bother predicting what will or won’t happen over the coming days as we head into Week 16.

It’s also worth keeping tabs on where other commodities are heading on Thursday as markets digest the latest tariff backflip.

In the background, of course, is now the prospect of a Chinese trade war with the USA. Trump is no longer the sole catalyst in the room.

The question is whether the global stage has room for two beasts or only one alone.

As of mid-arvo this Thursday:

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That’s officially a YTD low for what is the key economic pillar of Australia’s export economy.

The thinking goes that China, now dealing with the economic impacts of tariffs – both those imposed upon it by the USA, and, those it imposed itself on the USA in retaliation – will take some steam out of China’s already-struggling property and construction sectors, culminating in less demand for iron ore.

Iron ore, is of course, the major lifeblood of the Australian economy. It effectively commands the price of our currency, given the AUD is viewed in forex houses around the world as a bellwether of the Chinese economy.

As such, this decline in iron ore prices stands far more likely to hurt Australians than anything Trump could do to Australia tariff wife, given our relatively small trading partnership with America (when, at least, compared to China.)

The price of iron ore is going down with a basket of other hard commodities as investors try to make sense of current market chaos but arrive on the conclusion that in the short term, demand for commodities is likely to suffer as economies now enter mini (or not so mini) tariff-borne winters.

And it’s been bad news for a number of well known names on the stock exchange, including the ASX’s second largest company, BHP.

Just take a look at the following well-known iron players. As of 1.20pm AEST:

As for where the markets head from here, who knows.

The big question is for how long China and America can keep ratcheting up the tension. It does seem unlikely the US would impose 104% tariffs on China for the next four years.

Especially considering that, as much as America wants to try and pretend otherwise, de-coupling from China completely without decimating what consumers can buy on the shelves at home is a complete fantasy.

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Any additional cut (only the second in four years, mind you) would bring things under 4% again for the first time since mid-2023 when the RBA hiked six times.

Discussions near-instantly turned in that direction, with borrowers eager to see even more pressure drained out by more hard chops.

Judging by messaging after this February trim though, they may be too eager.

While the central bank kowtowed to global moves and lowered rates by 0.25 basis points, the RBA then immediately flashed the alarm for Australian borrowers: Don’t count on much more rate relief through this year.

“The market is expecting quite a few more interest rate cuts in the middle of [the] next year, about three more on top of this,” Ms Bullock said on Tuesday. “Whether or not that eventuates is going to depend very much on our data.”

Then the kicker – “Our feeling at the moment is that that is far too confident.”

The wider RBA board had a similar feeling, warning “upside risk remains” and that everyone may be getting a bit over-excited this week.

“While today’s policy decision recognises the welcome progress on inflation,” the central bank’s brains trust decision-makers said in its carefully worded Tuesday release, “the board remains cautious on prospects for further easing.”

The feeling seems to be quite simple: High interest rates are working to bring down demand for goods and services and the economy is (slowly) catching up.

And so, things start to feel very cautious again, even in a week that heralded a cut.

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Interestingly, markets already seem to be looking to the RBA’s July meeting. This would see the Reserve Bank skip making any cuts in April and May.

On the central bank’s side, the RBA will now closely watch how Australia takes this week’s chop; it believes restrictive rates are still very necessary to pull a bit more demand out of the wider economy and really wrangle consumer prices in a meaningful way.

“The forecasts suggest that if monetary policy is eased too much too soon disinflation could stall and inflation would settle above the midpoint in the target range,” the board explained to partially defend its still quite hawkish stance.

“In removing a little of the policy restrictiveness in its decision, the board acknowledges progress has been made, but is cautious about the outlook.”

Today, the cash rate sits at 4.1%. It may now stay that way for some time.

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The democracy Down Under has lagged behind the U.S. in its inflationary spiral and – perhaps unsurprisingly – has been among the last developed economies to cut their rates.

Now, we’re in line with our peers… in the sense of getting the ball rolling, at least.

Even our sister counterpart New Zealand started cutting, but to be fair, NZ had a ‘real’ or technical recession (compared to Australia’s per-capita recession).

This comes as Oz inflation – at the Trimmed Mean Inflation (TMI) or ‘core’ level – sits just two pips above the upper target band of 2% to 3%.

The RBA’s decision validates analysts and economists from just about every large player in the Australian financial sector: Most who dared to forecast widely called a February chop.

Before the latest inflation data, there was a 100% chance baked in for April on money markets – but beliefs that the RBA would cut rates in February 2025 go back to the middle of last year.

(Full disclosure: I’ve written more than once they probably wouldn’t happen.)

But this RBA story isn’t over. As more than one analyst has conversely offered, Australia’s job market remains firm at a level where, at least using pre-COVID-19 ideas of economics, one may expect inflationary upside pressure to remain.

The news is likely to be of foremost psychological relief to mortgage holders whose lives have been made financially harder through COVID and in more recent times through rising insurance costs.

The good news is the cuts come without having been preceded by any kind of mass mortgage default crisis in Australia.

The Australian consumer, or at least those who’ve been lucky enough to be closer to the middle of the spectrum, has been surprisingly resilient.

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While Bendigo pointed to an expected rise in mortgage arrears in its sentiment-tanking earnings report on Monday – this has been a recurring theme across many bank earnings reports in recent years – the country’s property market looks intact for now.

The question now is how long the falling feather effect will take to kick in. When Canada cut rates ahead of the U.S. in 2024, the TSX took a while to really respond. The same was true for Europe and the U.K.

The U.S. was more immediately exciting. Of course, Wall Street is senseless to compare.

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Adding to this is the chatter around our central bank, which has been under pressure to cut rates, but has largely resisted this, choosing instead to keep the cash rate steady at 4.35% – a position it’s held since November 2023.

Reflecting on how the Aussie economy has performed in 2024 – and how it might fare in the following year, given various headwinds including a second Trump administration in the U.S. and a continuing slowdown in China – ANZ senior economist Catherine Birch contributed several thoughts on the outlook.

Starting with the recent GDP numbers, Ms Birch said it showed the impact high inflation has been having on Australia.

“We did see the slowest annual GDP growth in Australia outside of the pandemic, since the 1990s recession, and that does show the economy is really feeling it at the moment,” Ms Birch explained.

“We have seen inflation really be a challenge for the economy. That has certainly caused some challenges for many industries and parts of the economy: construction is a big one in particular.

“We know a lot of construction firms have really struggled with the sharp rise we’ve seen in input costs. And some of the supply disruptions have really constrained how much can really be done, and therefore limiting growth as well.”

In response to high inflation, the RBA had taken a tough line on rate cuts – and had received pushback for this. But Ms Birch said it’s important to remember Australia had differed from other countries in terms of its initial experience with inflation, and how the RBA had chosen to respond to this.

“We saw inflation pick up later, we saw it peak later, but it’s also been slower to come down as well,” she said.

“And one of the differences, not only in the timing of rate changes versus other central banks, is that the RBA took our cash rate to 4.35% – well below a lot of comparable economies.

“For example, over in New Zealand, their OCR peaked at 5.5%, we saw over in the US, the rates peaked at 5.25-5.5% as well.

“So one of the reasons the RBA did that was that they were willing to tolerate a slower return of inflation back to target with the benefit being that unemployment wouldn’t rise as much if they took rates even higher to try and get inflation back to target sooner.”

Indeed, evidence of a consistently resilient labour market in Australia seems to have justified the Reserve Bank’s actions.

Looking into the new year, it was likely that – unexpected data notwithstanding – the RBA’s cautious policy would be likely to continue.

“We’re expecting that the RBA will start to cut rates in May and that there will be only two 25 basis point rate cuts in this cycle – so getting down to 3.85% by August next year, and then staying there,” Ms Birch said.

“A lot of people might not want to hear that sort of forecast. It will depend quite a bit on the data as to when the cuts start.

“If we see inflation and labour market data and household spending becoming weaker than expected over the next couple of months, it’s possible that they may start to cut rates in February.”

Turning to global headwinds in 2025, Ms Birch said the key word guiding predictions for both the Australian dollar and commodity prices was ‘volatility.’

The former would be likely to drop in the first half of the year, influenced by the anticipated impacts of Donald Trump’s promised tariff policy.

“We think that we’ll be seeing, by the middle of 2025, the Aussie dollar at around 63 US cents, but potentially there are periods where it gets lower, closer towards the 60 cents mark,” she said.

However, Ms Birch added several variables would enable Australia’s economy to survive these headwinds, with the dollar moving back towards 67 cents in the second half of 2025.

“We think Australia is still relatively well placed compared to a lot of other economies in terms of our growth outlook, and also our ability to deal with any shocks coming up as well, so that room we have on the fiscal policy side and monetary policy side,” she said.

Geopolitical and global economic volatility would likely also retain the strength of gold as a safe haven, she added, while other commodities would be shaped by trends coming out of Beijing.

“We think about something like lithium – the oversupply in batteries that we’re seeing in China will likely limit the near-term outlook at least, but the longer-term outlook still looks really positive,” Ms Birch said.

“And then of course there’s the China story as well: With that slowdown, that structural weakness that we’re seeing in the property sector only being partly offset by some of the stimulus measures and the move towards those new productive forces.

“So more investment in renewables and things like EVs and green infrastructure. Now, those sorts of things should boost things like aluminium and copper and some supply disruptions in those metals should also protect any price downside.”

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Despite all those calls, the RBA held firm. No rate cut for a ninth consecutive meeting.

That, just as loudly as those calling for trims, suggests the RBA has a plan it simply won’t be wavering from any time soon – even if bending would be far easier.

What that looks like hasn’t been totally clear over the last few months but after yesterday’s decision to keep things stagnant at 4.35% again and then Michele Bullock’s comments and key responses through her presser an hour later (most of which were quite dovish, if you ask this finance journalist) we start to see the picture.

One key battleground the RBA is watching closely is, of course, inflation. It still wants to see it ease further. “It remains too high,” the central bank said in a written address.

That’s not to say things aren’t moving in right the direction though – if a little slowly.

“We think things so far are moving in line with our forecasts,” Ms Bullock said, pointing in particular to quarterly prints. “If they continue to move in line with our forecasts, then at some point inflation… we’re going to be convinced that inflation is coming back to the band and we’ll be in a position to consider that.”

In her comments, Ms Bullock revealed the RBA feels at least somewhat similarly to analysts and punters in that a rate cut wouldn’t go astray soon. Unlike outside forces though, the RBA’s governor has to be certain when she makes the call.

“We’re not saying what we might do,” the RBA figurehead continued, “but we are acknowledging that there is some softening and our forecast is to see inflation coming back down gradually over the next year.”

Even more positively, she added: “As each quarter goes by, and our forecasts look like they’re basically in line… that gives us a little bit more confidence in the future.”

And so how does this all impact the RBA’s secret-slash-not-so-secret battle plan?

Well, the battle’s not over yet – Bullock was very firm on that – but a turning point is in sight. The RBA made a point to “not explicitly consider an interest rate cut” in its last 2024 meeting as it already had a date circled.

“The board spent time talking about what are the sorts of things that would make them move one direction or the other,” Bullock explained.

The plan, it seems, is to tee up the turning point for February next year.

There are always more factors the RBA will take into account, including loosening in the labour market (which the central bank has long said it watches) as well as predicted economic expansion to the end of the year.

But, markets have begun moving already. Everyone loves to price things early, we know that well by now, and the Aussie dollar was the first to shift down on the dovish comments. The bond markets were quick to follow too, with traders in that space ramping up bets that changes are coming somewhere in early 2025.

No promises from anyone on cuts just yet though: Ms Bullock wouldn’t be cornered into any trimming pledges during the RBA’s conference on December 10, declaring “I honestly don’t know if we’re going to be cutting in February.”

“We’re going to be looking at the data and be data-driven,” she added.

All this says for anyone playing along is the RBA won’t be shaken (or stirred) into action before it’s ready. The masterminds at the central bank have a plan they’re not so willing to share, but it will unfold sooner rather than later.

Last time it was Ms Bullock and the RBA “not ruling anything in or out.” Now it’s sticking to the plan. Next, maybe, that behind-the-scenes plan means rate cuts.

The RBA’s next meeting will now be in the new year, from Monday, February 17.

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And offering a critical backdrop, there is the ongoing reality of geopolitical instability and tensions, as well as news flow from critical economies such as China, which have driven rallies but also demanded a closer inspection to predict where commodity prices may go in the future.

One of the most talked about of these commodities is of course, lithium, which hit an all-time high of 5750,000 Chinese yuan per tonne (CNY/t) in December 2022 before slumping and showing volatility ever since; it’s trading now at 72,500 CNY/t.

This year has been a particularly bad one for the critical metal, with it falling 24,000 CNY/t since the start of 2024, based on trading on a contract for difference (CFD) which follows lithium’s benchmark market.

Reflecting on these patterns, Saxo Bank’s Head of Commodity Strategy Ole Hansen said the lithium market appeared to have reached its lowest point, but a move up again could take time.

“The lithium market remains challenged by the overproduction capacity built up during and after the 2022 surge and subsequent collapse,” he said.

“With the current price starting to make some projects uneconomical, it’s our view that the race to the bottom has ended – however, for the price to recover, demand has to improve, and this may take longer to achieve given the slowdown in EV rollouts.”

Despite being highly watched and newsworthy, the market for electric vehicles (EVs) is definitely on a slow track, as evidenced by Ernst & Young’s fifth annual Global Mobility Index, which showed demand levelling off, with buyers expressing concern about the infrastructure for charging.

Released in September, the report included 19,000 respondents across 28 countries, and indicated that interest in purchasing an EV was still present – rising from 55% to 58% since the previous year – but still sluggish, with demand shifting from 30% to 55% between 2020 and 2023.

For most respondents (27%), their key issue was lack of charging infrastructure, while 25% said they were concerned about EV range, and 18% saying that the length of time taken to charge the vehicles was also on their minds.

A new question in the survey – on the cost of battery replacements – returned a 26% expression of concern about this issue.

But this reflects only one part of a wider story, which Mr Hansen said was a move by investors away from stocks connected to the green energy transition.

“I see very little enthusiasm for green transformation metals and the companies involved – reflected in the steep losses the related stocks have witnessed in the past 18 months,” he said.

“For that to change, the fundamental outlook needs to improve, followed by hedge funds abandoning long held and very profitable short positions across the green transformation and energy storage sectors.”

Mr Hansen also pointed to economic news coming out of China as an underpinning factor in the performance of lithium and other metals.

“China has yet to address their overriding problem, which is low consumer confidence, and an oversupply of housing funded by underfunded banks and local governments,” he said.

“With that in mind, a recovery will be bumpy, but overall, the electrification of China is ongoing at a rapid pace and that will continue to underpin demand for copper and lithium while other products like steel and iron ore may struggle.”

The red metal has – in contrast to lithium – experienced a very good year indeed, reaching an all-time high of US$5.20 per pound (lb) in May, with an overall rise of 0.45 USD/lb or 11.60% since the start of 2024. (Currently trading at US$4.33/lb.)

“Copper continues to receive a great deal of focus from investors looking for higher prices amid strong and rising demand driven by the green transformation,” Mr Hansen said.

“However, the rallies seen this year have been unsupported by fundamentals, as China’s housing sector has struggled and inventories monitored by the major futures exchanges have stayed elevated.”

He added investors might be cautiously looking at conditional factors in the short term but maintained that copper would be on solid ground in the long-term.

“We maintain a bullish outlook for copper but for now, the upside is limited due to an overhang of supply and worries about the economic outlook,” Mr Hansen said.

“The electrification of the world is real and, in the coming year, the combination of robust demand towards grid upgrades and electrical appliances will likely be met with tight supply from miners struggling to increase production.”

An even stronger performer this year has been of course, gold – which reached an all-time high of US$2,790 per Troy ounce on Wednesday (October 30), with an overall rise of US$721.72/t oz, or 34.99% since the start of 2024.

Given the proximity of this recent leap to the U.S. election next Tuesday, one could be forgiven for thinking this was the key factor to keep in mind. Mr Hansen said it was certainly relevant, but added that a long list of other political and economic concerns were also keeping this commodity strong.

“I see limited signs of exhaustion in the gold market,” he said.

“The metal has rallied by more than 30% this year as investors around the world seek protection against multiple uncertainties, all pointing to an unsettled world.

“The main drivers of this bullish phase include concerns over fiscal instability, safe-haven demand, geopolitical tensions, de-dollarisation driving strong demand from central banks, Chinese investors turning to gold amid record low savings rates and property market fears, and increased uncertainty surrounding the US presidential election.

“Additionally, rate cuts – by the US Fed and other central banks – are reducing the cost of holding non-interest-bearing assets like gold and silver. This environment is already spurring renewed interest in gold-backed ETFs, particularly from Western asset managers who have been net sellers since May 2024.”

When it comes to the link between the Trump-Harris race and trends in the gold price, Mr Hansen outlined a theory of how fears about a Republican-dominated political scene were pushing investors towards the safe haven of this metal.

“Given how the geopolitical risk premium has deflated in crude oil (which slumped the most in two years on Monday), we conclude that the latest strength in gold is increasingly being seen as a hedge against a potential ‘Red Sweep’ in the US election, where one political party (in this case, the Republicans) controls both the White House and Congress,” he said.

“This scenario raises concerns about excessive government spending, pushing the debt-to-GDP ratio higher, while fuelling inflation fears through tariffs on imports and geopolitical risks.

“Investors are turning to precious metals as protection, even as expectations for lower rates and easier financial conditions fade, as the FOMC may end up being forced to pause the current rate-cutting phase.”

At this stage, the race is still very tight, with a CNN report on Wednesday indicating Harris maintains a tiny edge over Trump in two of three key states and is tied with him on the third.

Michigan voters appear to favour Kamala Harris by 48% compared to Trump’s 43%, while in Wisconsin the difference is 51% in her favour, against 45% for Trump. In Pennsylvania, voters have shown 48% support for each candidate.

Upon news of the result next week, Hansen added, the situation for gold might change.

“Nothing ever goes in a straight line and, having rallied as much as it has, gold can still run into a deep correction after November 5 if a ‘sweep’ scenario does not ensue,” he said.

“But as long as the above-mentioned reasons for holding gold do not go away, the prospect for even higher prices remains.”

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Bullion climbed to above $US2,700 ounce last week – and has then maintained those lofty heights through Week 43 on the ASX – to extend its yearly gains by more than 30%. The modern-day gold rush can only be described as “all a bit nuts,” which is why market analysts have been proclaiming exactly that.

Even a slight dip today (less than a full percent) did little to dampen spirits.

But some have been bigger winners than others Down Under, with several gold miners on the ASX enjoying the major price rises these last few shining months.

Bellevue Gold Ltd (ASX:BGL) may have taken a hit price-wise after a $150 million capital raising in July, but the well-placed Yilgarn Craton miner has still climbed nearly 10% through the last year; a 35.54% this past month really helped. Last at $1.64/share.

Capricorn Metals Ltd (ASX:CMM) has jumped 37.31% YTD, including a 28.73% hike in the last six months. Should its plans to three-fold its production in as many years bear fruit, things could end up looking even better too.

More than 390,000 ounces of gold sold in the last three months to the end of September made Northern Star Resources Limited (ASX:NST) one of the biggest winners of the precious metal gains. The gold producer, which operates in the Yandal and Kalgoorlie in Western Australia as well as Pogo in Alaska, gained 43.08% this year.

Managing director Stuart Tonkin today said he’s “confident” Northern Star will achieve its full-year production and cost guidance at 1,650-1,800 koz gold to boot.

Newmont Corporation (ASX:NEM) has been among the top companies cashing in on bumper profits for bullion miners, with a 36.99% improvement YTD.

The super-sized Colorado-based gold mining company, which is also listed on New York Stock Exchange, is amidst a share repurchase program. The program will see it rebuy up to $2 billion of its common shares over the next 24 months.

Perseus Mining Ltd (ASX:PRU) ($2.93 today) leveraged lofty gold prices alongside its strong cash generation to start FY25 and has lifted 66.19% over the past 12 months.

Last but definitely not least, West African Resources Ltd (ASX:WAF) actually had the biggest gains through these half-dozen highlights: The emerging mid-tier gold producer closed today at $1.76 a share off the back of a quarterly-driven 4.01% rise.

That marks a sizeable 82.65% jump in price YTD – even after President of West African nation Burkina Faso (where West African Resources has its biggest project) considered removing mining permits from foreign companies.

Whether these gold prices hold remains to be seen, though the hype on bullion seems set to stay strong at least until the U.S. election early next month.

Conversely, deputy governor of the Reserve Bank, Andrew Hauser, did admit at a Commonwealth Bank investor briefing last Monday he thinks it’s all been “spectacularly optimistic” – prices didn’t move much then though.

Whatever happens, for the time being ASX gold miners are enjoying the sheen.

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This was the bad news aspect of the Australian Bureau of Statistic’s release of GDP data for the June quarter, which revealed that for that period, economic growth was at 0.2% – a figure which represented eleven consecutive quarters in the green, and the same reading as for the March quarter of this year, and 2023’s December quarter.

The June quarter figure was largely in-line with expectations.

However, the consistently weak readings across several months has caused a pulling-down effect on the annual data, with the ABS saying that between June 2023 and June 2024, the Australian economy grew by only 1%.

ABS head of national accounts Katherine Keenan acknowledged this in her commentary following the data release.

“The Australian economy grew for the eleventh consecutive quarter, although growth slowed over the 2023-24 financial year,” she said.

“Excluding the COVID-19 pandemic period, annual financial year economic growth was the lowest since 1991-92 – the year that included the gradual recovery from the 1991 recession.”

Also concerning was the number for growth on a per-person basis – which was down by 0.4%, representing the sixth consecutive quarter in the red.

Household demand is unsurprisingly the main factor underpinning this data, with this detracting 0.1 percentage points from GDP growth, while government consumption added 0.3 percentage points – the same contribution as seen in the previous quarter.

The latter represented continued strength in social benefits to households, while weak discretionary spending was the cause of falling household demand.

Indeed, household consumption – which fell by 0.2% in the June quarter – was at its weakest growth rate since the September quarter of 2021, impacted by the Delta-variant lockdown.

Discretionary spending was down 1.1%, following a rise in March. 

Spending on essential grew however by 0.5% during the June quarter, influenced by rent and other dwelling services expenses, as well as fuel costs – where spending was up 2.4% due to a reduction in rebates which had been provided during the quarter, and increased need for heating.

Food spending was down 1% as people turned to less expensive options.

Saxo Head of FX Strategy Charu Chanana said the readings were not the market’s main focus for today, but still something to watch.

“Today’s Aussie GDP data isn’t enough to take the focus away from global risk-off activity,” she said.

“There’s a curious case here as to how long the Australian economy can avoid a slowdown if global growth is headed lower.”

However, the reading was also moderated by the impact of state and federal government rebates on electricity bills, which are expected to have only a temporary impact on inflation.

UBS and TD Securities had both anticipated a 3.5% rise for the month, although a lower rate of 3.4% had been expected in other quarters.

In its release to the market, the ABS said the biggest sectors impacting price rises were housing – which was up 4% in July – food and non-alcoholic beverages (up 3.8%), alcohol and tobacco (up 7.2%) and transport (up 3.4%).

Drilling into the housing sector, the numbers for July reflected trends we have been seeing for a while: with builders passing on increased costs and building material costs, impacting the pricing of new dwellings – which saw an annual rise of 5%, down from 5.4% in June, although the reading has been circulating around the 5% mark since August 2023.

Likewise, a tight rental market – marked by low vacancy rates in most capital cities – has kept rental prices high, coming in at a 6.9% increase in the 12 months to July, a revision down from the 7.1% increase in June.

One factor to watch is the impact of energy bill rebates from State and Governments, with the ABS saying that these were the driver behind a fall in electricity prices to 5.1% in the 12 months to July – down from a 7.5% rise in June.

The 2024-25 Commonwealth Energy Bill Relief Fund (EBRF) rebates and State government rebates in Western Australia, Queensland and Tasmania were all introduced in July, with households in Queensland and Western Australia receiving the first installment of the Commonwealth EBRF rebate in the same month.

Households in the remaining capital cities will receive their first rebate instalment from August 2024. 

Additionally, state government support such as the $1,000 Cost of Living rebate in Queensland, the first instalment of $400 energy rebate in Western Australia and the $250 Renewable Energy Dividend payment in Tasmania helped rate payers in those states reduce their electricity bills.

Given the temporary nature of these initiatives, a cooling figure of inflation for July – to which they have contributed – may not represent an overall softening trend, and the Reserve Bank of Australia will be keeping its eye on all of these factors when it meets next month.

The seasonally adjusted Wage Price Index for the June quarter rose 0.8% – the same figure as in the March quarter – although the market had priced in a rise to 0.9% for the period.

Across the whole year, the WPI rose 4.1% – and this too had not changed, although it came in slightly above the 4.0% expectation. This continues the trend of annual wage growth remaining above 4.0% since the September quarter of 2023.

The public sector is storming ahead in terms of wage growth, with a seasonally adjusted rise of 0.9% for the June quarter. This was not only a lift from last quarter’s 0.6% reading, but also represents the highest rise for the sector in a June quarter since 2012, when it came in at 1.0%.

Looking at the year to June 2024, public sector wages registered a rise of 3.9%: this was an increase from the 3.8% annual rise in the previous quarter, as well as the 3.1% recorded in the same period last year.

But private sector wages appear to be trending in the opposite direction: their growth for the June quarter was 0.7% – the equal lowest rise for the sector since December quarter 2021.

Similarly, private sector wage growth for the year to June quarter 2024 was 4.1%, following three consecutive quarters showing annual increases of 4.2%.

The ABS said the sectors providing the greatest boost to wage increases during the June quarter were public administration and safety (1.0%), construction (0.9%), and professional, scientific and technical services (0.7%).

The ASX200 moved up marginally on the cooler-than-expected reading, from 0.03 to 0.16%, before softening again.

The Reserve Bank of Australia elected to leave the rate on-hold at 4.35% during its August 5-6 meeting, with this being the seventh consecutive meeting without a change, since the cash rate was raised back in November 2023, from 4.10%.

Leading up to the decision, investment bank analysts had predicted the RBA would keep it unmoved, with this confidence largely boosted by a CPI reading released the previous week which showed a trimming of mean inflation for the June quarter to 3.9%, down from 4.0% in March, with this being lower than the market had expected.

However, following the decision, Reserve Bank Governor Michele Bullock told the press: “Make no mistake: inflation is still too high, and the board does remain concerned about the degree of excess demand in the economy”.

Explaining that the inflation rise had started during the Covid-19 pandemic – when supply shocks coalesced with growing demand for goods – Ms Bullock said the former had largely worked their way through the system, but demand was continuing strong.

With this in mind, she said the RBA needed to ‘stay the course’ to keep inflation in check, and ideally get it back to the target range of between 2 and 3%.

“The more inflation remains elevated, the more it hurts everyone,” she added.

Saxo Head of FX Strategy Charu Chanana said that while the decision to pause the cash rate had been priced-in, a lack of guidance from the RBA regarding future strategies to tackle inflation was concerning.

“While markets have removed the odds of another rate hike from the RBA after the softer Q2 CPI last week, there were no clear signals from the meeting for the markets to start considering rate cuts,” she said.

She noted that changes in the global economy had now put the onus on other central banks to consider rate cuts.

Thus, stronger statement might have been needed from the RBA, given recent global economic volatility – with recession concerns still in the background, despite markets making a recovery following a two-day rout on Wall Street at the beginning of the week.

Australia’s currency could be particularly hard-hit by hints of recession – Ms Chanana said – given the likely negative impact on commodity prices, a key driver for the Australian economy.

“There has been a sharp selloff in global equity markets amid increasing concerns about a US recession,” Ms Chanana said.

“This has accelerated calls for the Federal Reserve to deliver rate cuts sooner, potentially even before the September meeting, or to go big with a 50bps cut in September.

“Given the shift in the macro backdrop, the RBA lack of guidance on its rate cut plans at the August meeting seems to be a misstep: this could be problematic if global growth deteriorates beyond the soft landing many have hoped for.”

Head of macroeconomic forecasting for Oxford Economics Australia Sean Langcake said the August meeting had been a ‘close-run decision’ until the CPI release had come in last week.

But he expressed concern about the inconsistency of what the Reserve Bank was saying about sticky inflation in the economy, and what they were actually doing.

“The RBA’s statement remains vigilant against upside risks to inflation. But once again, the RBA’s cautious and hawkish messaging has not been backed up with any action,” he said.

“The RBA’s forecasts are projecting a more volatile path for inflation due to the impact of government policies announced in the last budget.”

He added that the RBA seemed to be watching the Australian economy for signs of sluggishness – appearing concerned about a weaker outlook for jobs in particular, although a rate cut this time around could have kickstarted a pushback on inflation trends.

“Interestingly, underlying inflation is now expected to chart a slower course back to the midpoint of the target range,” he said.

“But this outlook has not stirred the RBA to action this month. Indeed, this outlook is tempered by a slightly weaker outlook for the labour market than the one presented in the May forecasts.”

Mr Langcake said a rate cut was not likely until early 2025.

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However, the Australian Bureau of Statistics has reported that despite this substantial decline, the unemployment rate remains unchanged at 3.9 per cent.

“The fall in employment in December followed larger than usual employment growth in October and November, a combined increase of 117,000 people, with the employment-to-population ratio and participation rate both at record highs in November,” ABS Head of Labour Statistics David Taylor said.

“Both the unemployment and underemployment rates remained relatively low and the participation rate and employment-to-population ratio relatively high, suggesting that the labour market remains tight.”

While the participation rate held steady at 67 per cent, employment surged past 14.2 million people. However, the employment-to-population ratio saw a slight dip to 64.4 per cent.

While the December employment fall was large, the number of employed people was still 52,000 higher than in September.

Over the past year, the number of employed individuals, adjusted for seasonal variations, has been steadily growing. On average, there was an increase of 32,000 people each month, reflecting a consistently positive trend throughout 2023.

Delving into the analysis, Oxford Economics Australia Lead Economist Ben Udy sheds light on a concerning aspect: a notable drop of over 100,000 full-time jobs, somewhat mitigated by an uptick in part-time positions.

This shift resulted in a 0.5 per cent decrease in total hours worked, signaling a potential softening in labor demand. Mr Udy underscores that the decline in the number of job seekers played a crucial role in preventing a sharper increase in the unemployment rate.

“While the unemployment rate was unchanged in December, employment collapsed and the softening in the labour market is now undoubtedly well underway,” he said.

“We expect this softening to continue in 2024 and forecast the unemployment rate to approach 4.5 per cent by the end of this year.

“The only thing that kept the unemployment rate from rising sharply was a large fall in the number of people looking for work.”

The data aligns closely with the Reserve Bank of Australia’s November forecasts, limiting immediate implications for monetary policy.

The upcoming release of fourth-quarter inflation data at the end of January will be crucial for the RBA’s decision-making process

Mr Udy emphasised that while it was important to remain cautious on reading too much into a single monthly data point, the deterioration in the labor market was clearly in “full swing”.

Today, Bitcoin is trading at more than US$42,000 at a maximum supply of 21 million coins, and there are predictions it could surge to new heights in 2024.

But what happened this year to propel this industry?

The Market Herald has compiled a list of some of the biggest stories to headline the crypto industry in 2023, with expert commentary from Investment Analyst Matthew Harcourt from cryptocurrency investment company Apollo Crypto.

Mr Harcourt delves into the news headlines, trends and precedents that have set the trajectory for the industry as it heads into 2024.

Crypto assets run on a technological platform known as a blockchain, enabling investors to confirm transactions without needing clearance from a central finance authority.

The platform itself is highly unregulated, however, this year there’s been heavy talk on how it can be regulated to increase financial security across the board.

In October this year, Australia saw some action with the Federal Government’s release of a proposal paper outlining recommendations to enhance the regulation of cryptocurrency exchanges.

“Going into 2024, the regulatory crackdown is likely to shift from centralised exchanges to decentralised exchanges…,” Mr Harcourt explained.

Centralised exchanges are controlled by one major entity, which means faster transactions and easier use. They act as intermediaries between buyers and sellers for higher liquidity.

Decentralised exchanges offer lower transaction fees and allow users to hold onto their crypto assets, meaning they can avoid some of the regulatory burdens already in place.

“…a little bit of worry is in the market about the SEC (Securities Exchange Commission) trying to apply the old rule of law to these completely new technologies and businesses to sort of better their interests – which is pretty much what they did with centralised exchanges throughout this year…,” Mr Harcourt said.

Mr Harcourt said the crypto industry was geared to experience continual regulatory clarity from leading jurisdictions like Hong Kong, Europe and parts of the Middle East in 2024.

“I suspect that the U.S. will continue to fight the industry and push innovation off-shore -as has been the trend for years,” he predicted.

This year, the world’s largest crypto asset manager, Grayscale, took the US Securities Exchange Commission (SEC) to court over the rejection of its spot Bitcoin exchange-traded fund (ETF).

The legal dispute concluded with the SEC instructed to discard its initial rejection grounds. Grayscale emerged victorious, securing approval to launch the ETF.

The anticipated debut for the first-ever spot Bitcoin ETF is now slated for January 2024, marking the first substantial deadline for filing denial.

“Grayscale’s win in court shows that when the rule of law is fairly applied, the SEC will not be able to use its overwhelming power and resources in an unfair way,” Mr Harcourt said.

“Going forward, it shows that the SEC will need to operate more fairly with the crypto industry as they will not be able to bully the industry the same way when in court.”

The SEC has had its victories too.

This year, one of the wealthiest individuals to ever grace the crypto industry experienced his downfall. Sam Bankman-Fried was convicted on fraud charges concerning his FTX crypto exchange.

His empire crashed in November 2022 at a value of $40 billion, along with his Alameda Research trading firm, forcing Mr Bankman-Fried to file for bankruptcy.

Mr Bankman-Fried is serving a maximum sentence of 115 years in a US prison.

Within weeks of that decision, the founder of the world’s largest cryptocurrency exchange, Binance, Changpeng Zhao, was fined $50 million and stepped down as CEO after pleading guilty in a Washington District Court to violating US federal law.

Mr Zhao violated laws that require financial institutions to guard against money laundering and terrorist financing. He’s due to be sentenced early next year.

Binance as a company pleaded guilty to wilfully violating the Bank Secrecy Act, knowingly failing to register as a money transmitting business, and willfully violating the International Emergency Economic Powers Act.

The US Department of Justice alleged its platform accommodated criminals across the world who used Binance to move their stolen funds and other criminal proceeds.

“Binance enabled nearly $900 million in transactions between U.S. and Iranian users,” The Department of Justice Attorney General Merrick Garland reported.

“And it facilitated millions of dollars in transactions between U.S. users and users in Syria and the Russian-occupied Ukrainian regions of Crimea, Donetsk, and Luhansk.  

“For example, between August 2017 and April 2022, there were direct transfers of approximately $106 million in bitcoin to Binance.com wallets from Hydra, Hydra was a popular Russian darknet marketplace, frequently utilised by criminals, that facilitated the sale of illegal goods and services.

“From February 2018 to May 2019, Binance processed more than $275 million in deposits and $273 million in withdrawals from Bestmixer.  Bestmixer was one of the largest cryptocurrency anonymizing services in the world before it was shut down for money laundering.

“Binance also did more than just fail to comply with federal law – it pretended to comply.

“The message here should be clear: Using new technology to break the law does not make you a disruptor. It makes you a criminal.

“The Justice Department is requiring Binance to pay $4.3 billion in penalties and forfeiture.”

Earlier, in March, the SEC announced charges against crypto asset entrepreneur Justin Sun and three of his companies, Tron Foundation, BitTorrent Foundation and Rainberry, for the unregistered offer and sale of crypto asset securities Tronix (TRX) and BitTorrent (BTT).

The SEC also charged Sun and his companies with fraudulently manipulating the secondary market for TRX through extensive wash trading, involving simultaneous, or near-simultaneous, buying and selling of a security, so it seems actively traded without an actual change in ownership. Interestingly it also laid charges around orchestrating a scheme to pay celebrities to tout TRX and BTT without disclosing their compensation.

The SEC simultaneously charged the following eight celebrities for illegally touting the securities without disclosing their compensation – those celebrities included Lindsay Lohan. She was ordered to repay the US$10,000 she was paid to promote Sun’s TRX and BTT to her 8.4 million Twitter, or X, followers, plus a US$30,000 penalty.

Recent reports suggest some platforms that Sun backed, including exchange HTX, had been hacked for well over US$100.

When asked about his main concerns regarding crypto crime heading into 2024, Mr Harcourt said there were others in the industry that the SEC would be watching. For one, it has been trying to serve a lawsuit against Hex and PulseChain Founder Richard Heart.

While Mr Harcourt said there was no way to know for certain if Bitcoin would edge even higher in 2024, the strong support for a Bitcoin ETF suggests the market is poised to see some positive action.

“…if the macro picture stays favourable…I do think you’re going to get strong price action in Bitcoin and then that will flow onto the crypto market more broadly,” he said.

Mr Harcourt emphasised that Bitcoin ETFs could be a catalyst for institutional adoption, as they boast easy, safe and accessible investment characteristics for large companies.

International crypto giant BlackRock also joined the ETF industry with an Ethereum fund under its iShares Ethereum Trust division. This was confirmed in early November through a listing on the NASDAQ.

“…at the moment, there’s there’s a lot of hurdles from these internal compliance perspectives and so an ETF that’s created by BlackRock, the largest asset manager in the world … there’s no lower barrier to entry into buying Bitcoin than that institution, essentially,” he continued.

Lastly, Mr Harcourt touched on the utilisation of blockchain technology, by banks through what’s known as tokenisation. Tokenisation is the blockchain digital representation of assets.

“Going forward you may start to see competition from other banks heating up in the tokenisation space, banks will also look to become crypto custodians,” he said.

WA is leading the nation with dwelling approvals up 11 per cent, followed by Queensland which saw a 10.7 per cent increase and New South Wales 9.6 per cent.

However, Australian Bureau of Statistics (ABS) Building Approvals data today showed approvals this financial year to be well down – more than 10,500 down – from the same time last year, with 55,029 approvals from July to October this year.  

ABS head of construction statistics, Daniel Rossi said approvals were low this financial year.

The Real Estate sector traded down more than one per cent after the data was released today.

“Approvals for private sector dwellings excluding houses increased 19.5 per cent, following a 3.4 per cent fall in September,” Mr Rossi said.

“Approvals for private sector houses rose 2.2 per cent, following a 4.7 per cent September decrease.

“Despite the monthly increase, total dwellings approved have been low this financial year, in original terms, 55,029 dwellings were approved between July and October in 2023, compared with 65,599 over the same period in 2022.”

Some states and territories were down, dwelling approvals were down 14.4 per cent in Tasmania, 7.2 per cent in South Australia and 1.4 per cent in Victoria.

The value of new residential building rose 8.9 per cent to $6.36 billion, while the value of non-residential building values rose 6.2 per cent to $5.91 billion, rebounding from a 7.6 per cent fall in September.

Master Builders Australia chief executive officer Denita Wawn expressed caution, noting that rising interest rate could erode the positive gains.

She called for sustained momentum, stating that over the calendar year to date, only 166,236 homes had been approved, well short of the 200,000 homes required.

“Achieving the 1.2 million new homes in five years as envisaged under the Housing Accord will be a huge challenge,” she said.

The organisation’s chief economist Shane Garrett said the total number of new home building approvals rose to 14,223 in seasonally-adjusted terms during October.

“This was 7.5 per cent up on the previous month and represents the highest result since May,” he said.

“October’s solid gain came in the wake of the four-month pause in RBA interest rate hikes.

“During October, there was a particularly large increase in the volume of higher density home building approvals (+19.5 per cent).

“This is important because the rental market is currently in desperate need of more medium and high-density homes.

“The shortage of rental accommodation recently drove rental price inflation to its fastest pace in almost 15 years.

“ Delivering more increases in higher density housing output will help to further dilute rental market pressures.

“New detached house approvals saw modest growth of +2.2 per cent during October.

“However, activity on the detached housing side of the market remains at a low ebb due to development-ready land shortages and the detrimental effect of interest increases.”

In addition to building approvals, the ABS released new capital expenditure data today.

Private new capex rose 0.6 per cent in the September quarter (seasonally adjusted, chain volume measures) to be 10.7 per cent higher than a year ago, with a 0.7 per cent increase in capex for buildings and structures in Australia.

The highest capital expenditure growth was in the mining sector, which saw a 5.6 per cent rise.

ABS head of business statistics Robert Ewing said the mining industry was the main driver.

“This was offset by a fall in non-mining industries, down 1.3 per cent after large rises in the previous four quarters,” he said.

“Capex was up 0.5 per cent for new equipment and machinery and 0.7 per cent for buildings and structures.

“The increase in building and structures investments was driven by mining, up 5.4 per cent. This industry raised its spending on iron-ore projects and battery-related mineral developments. It was offset by a fall in non-mining industries, down 2.2 per cent.

“The construction industry was the largest contributor to the rise in equipment and machinery capex. It grew by 15 per cent as supply-chain disruptions continued to ease.

“This allowed businesses to take delivery of new vehicles and heavy machinery,” Mr Ewing said.

Western Australia had the largest rise, up 7.5 per cent in the September quarter. This was offset by a large fall in Queensland, down 10.8 per cent in the wake of large rises in the March and June quarters.

Western Australia led overall growth (24 per cent) followed by Victoria (20.1 per cent).

“Growth in Western Australia was dominated by the mining industry, while growth in Victoria reflects a continuing recovery from steep declines during the pandemic,” Mr Ewing said.

Figures released today also include updated expectations of planned capital expenditure for the financial year. Businesses revised up their expectations by 8.5 per cent (in current prices) since the last estimate three months ago.

“The strength in planned capital investment shows that businesses expect continued growth in new capital expenditure over the rest of this financial year,” Mr Ewing said.

“The information media and telecommunications industry had a particularly large rise based on planned investment in new data centres.”

At face value, the data looks like it could add weight to the case for an RBA pause: retail sales in October fell 0.2 per cent, following a rise of 0.9 per cent in September.

Good news, right? The consumer is thinking about our nation and deciding to leave some big purchases alone for a little moment.

Well, not exactly. Black Friday sales may have been a bigger lure – implying that retail sales could sharply rise in the next data release we get.

There’s also the consideration that on a year-on-year (YoY) basis, October’s retail sales were up 1.2 per cent.

Spending fell across all categories, except for food retailing.

“It looks like consumers hit the pause button on some discretionary spending in October, likely waiting to take advantage of discounts during Black Friday sales events in November,” ABS Retail Statistics chief Ben Dorber said.

Mr Dorber is apparently all but expecting this to occur.

“This is a pattern we have seen develop in recent years as Black Friday sales grow in popularity.”

Oxford Economics Macroeconomic Forecasting chief Sean Langcake isn’t convinced that a 0.2 per cent fall in sales for October, regardless of Black Friday, is enough to turn the RBA dovish.

Only this week, RBA Governor Michele Bullock asserted Australia’s homegrown inflation is internally driven – in other words, global supply chains are less easy to blame.

“These data align with the narrative of fading consumer momentum … [but] they have little bearing on the RBA’s current struggle to rein in core inflation,” Mr Langcake said.

“We still expect to see another increase in rates in the coming months.”

The RBA most recently upped the cash rate to 4.35 per cent.

Australian CPI data drops tomorrow.

While a fractional increase in the unemployment market may seem like a good indicator of disinflation, the story is more complex.

The main reason Australia’s unemployment rate climbed 0.2 per cent in October is because the participation rate increased.

The number of people looking for work informs the participation rate.

In short, a larger pool of active workers means more people are unemployed.

The participation rate has gone back to 67 per cent for October, reversing a decline seen in September.

But Australia’s economy didn’t lose any jobs last month – in fact, it added 55,000 of them.

“With employment increasing by 55,000 people, and the number of unemployed people increasing by 28,000, the unemployment rate rose to 3.7 per cent in October,” ABS Head of Labour Statistics Bjorn Jarvis said.

“This was back to around where it had been in July and August.”

Unemployment has previously hit 3.7 per cent in 2023.

We reached that point in July, and it stayed flat into August. September would see a drop back to 3.6 per cent.

And now, in October, we’ve seen it arrive back at 3.7 per cent – even while adding 55,000 jobs. `

In short, the indicator is firmly tracking sidewards, and Australia’s labour market remains historically tight.

Oxford Economics Macroeconomics Forecasting chief Sean Langcake has, however, tipped a change in affairs for Q1 of 2024.

“Forward indicators of labour demand have softened, and we expect this will materialise in an increase in the unemployment rate in early 2024,” he said.

“While the unemployment rate ticked up in October, overall we see this a relatively strong print, and shows the labour market continues to defy the gravity of slowing activity and softening forward indicators.”

Mr Langcake noted employment growth was concentrated in part-time positions, but, full-time positions also climbed 17,000 in October, which boosted the number of hours worked.

All in all: no signs of a great labour market shake-out yet, but, at least one expert is looking to early 2024 for a change to the hum.

Fifty-eight per cent of respondents were considered to “have limited or no capability to protect confidential information adequately”.

A total of 697 companies took part in the cyber pulse survey for 2023.

The survey found that most Australian companies are reactive, and not proactive when it comes to cybersecurity management.

Further, 44 per cent in the survey didn’t manage third-party cybersecurity risks, where access from outside workers was concerned.

“It was alarming that 44 per cent of participants are not managing third-party or supply chain risks,” ASIC Chair Joe Longo said.

Smaller companies were generally behind larger companies with more time and money to implement stronger cyber controls.

“It’s not enough to have plans in place. [Systems] must be tested regularly – alongside ongoing reassessment of cyber security risks,” Mr Longo added.

Coincidentally, ASIC’s report has hit the public only 72 hours after Australian port operators were hit with a cyberattack.

On Friday, DP World Australia was targeted by an unclear type of cybersecurity intrusion.

In turn, four major ports across Australia had to shut down operations where DP World was involved.

The company handles some 40 per cent of all container traffic in and out of Australia.

But the risk to shareholders from cyber criminals is very real.

In recent history, healthcare coverage provider Medibank (ASX:MPL) was hit by an attack that led to the release of confidential customer information.

Shareholders punished the company with Medibank’s share price falling for months in response.

The price plummeted in October of 2022 and didn’t make back those gains until April of 2023.

While its recovery could be considered relatively fast-paced, the chart makes clear just how badly a cyberattack can impact valuation.

Listed law group IPH Limited (ASX:IPH) also called a trading halt in early 2023 following a cyber-attack on third parties.

That same month, the University of Wollongong Professor Alex Frino released his findings that only a fraction of ASX companies hit by cyberattacks ever reported the breaches.

“25 of the cyber attacks were only reported in the press, while only 11 were made public via ASX announcements,” Mr Frino wrote in a report cited by iTnews.

Higher taxes and interest rates will continue to hit households and national GDP growth will be below average across 2024, driven by low consumer demand.

At the same time, international students and migrants broadly are keeping the retail sector simmering.

Ms Kohler’s confirmation of a revised inflation trajectory follows a release from the central bank on Friday.

Late last week, the RBA stated inflation would only hit the three per cent target range in late 2025.

That move stirred some interest.

So much so, that the Wall Street Journal ran it as a story.

“Inflation is expected to be a little below three per cent at the end of 2025,” Ms Kohler said.

“We now expect [disinflation] to be a more gradual process than we previously thought, due to the still-high level of domestic demand and strong labour and other cost pressures.

“By contrast, domestically sourced inflation – in particular, services price inflation – has been widespread and slow to decline.”

While Ms Kohler flagged strong labour as a factor in slowing the disinflation trajectory, she outlined that RBA’s mandate is also – conversely – to maintain full employment.

Shelter prices – both for owners and renters – remain Australia’s most significant inflation pressure.

This tight labour market is part of the reason why inflation continues.

As producers’ prices go up, they pass those prices on to customers. And customers – most of them in work – have the money to pay.

“Business costs such as energy, rent and insurance have risen strongly, and labour costs have been pushed up,” Ms Kohler added.

Orthodox economic theory maintains that for disinflation to occur, unemployment must rise.

The RBA, meanwhile, finds itself juggling two roles – one as a monetary manager, and one as job market stimulator.

Ms Kohler also noted that large public infrastructure works were also a significant source of economic stimulus.

The ALP recently announced Canberra’s looking for major projects to cull in a bid to reduce cost blowouts boosting inflation.

This fairly uninspiring picture comes days after new OECD data put Australia in a bad light.

Quality of life in Australia has fallen the most out of all developed nations.

Disposable incomes have fallen to their lowest level since June 2019.

In the 12 months to June 2023, household incomes dropped 5.1 per cent.

Treasurer Jim Chalmers’ staffers put it on record that higher interest rates and inflation are to blame.

Staffers also pointed to a $23 billion cost-of-living relief plan. This comes as the government is also looking to cut $33 billion of infrastructure spending.

The government is also looking for $25 billion to fund defence applications, according to reports.