What's stopping the RBA from cutting interest rates? (Leithvo)

In this week's Treasury of Common Sense on Radio 2GB/4BC, I discuss all things inflation, including the key factor preventing the RBA from cutting interest rates.



The key factor stopping a rate cut is that employment levels are still very strong, but this is coming from government funded jobs. This is not sustainable since government spending is an expense that needs to be funded by the real economy. General inflation is still going up, it's not falling. The rate has only diminished somewhat. Rents and energy costs are still high (which need to be addressed - lower immigration, build new coal power plants). . 

Best comment on You Tube:

@addictiveaussie
The US 10 year yield is the spoiler. How can the RBA possibly lower rates with the long end spiking in US treasuries? I say they can't, and the reason they can't is obvious. The AUD will collapse to the low 50 level against the USD which will see inflation surge.

[Posted at the SpookyWeather2 blog, January 12, 2025.]