This is Bloomberg day Break Weekend, our global look at the top stories in the coming week from our Daybreak anchors all around the world. Straight ahead on the program, here comes the FED meeting. I'm Amy Morris in Washington.
I'm Ryan Courtesy in Hong Kong.
So what's next for the Reserve Bank of Australia continuing the pause on interest rates?
Or Hi?
I'm Kaylee Liones in Washington, where it looks like the twenty twenty four election season is already heating up.
I'm Stephen Kralen London, where final preparations are being made for the coronation of King Charles the Third.
That's all straight ahead on Bloomberg day Break Weekend on Bloomberg E Love the three own New York, Bloomberg ninety nine to one, Washington, DC, Bloomberg one O six one, Boston, Bloomberg nine sixty, San Francisco, DAB Digital Radio London, Sirius XM one nineteen and around the world on Bloomberg Radio dot Com and via the Bloomberg Business App.
To you, I'm anymore. As we begin today's program with a look at the FED, a key index of underlying inflation that's closely followed by the Federal Reserve remained elevated last month. Joining us now to talk about it and some of the other data we've seen in the past week, Bloomberg's Michael McKee, our Global Economics and Policy editor, Michael, it is a pleasure. Thank you for joining us. We had a lot of data out on inflation this past week. How does this overall tilt things for you in terms
of what the Fed does at the upcoming meeting. Let's just start with the inflation data that came out Friday.
Well, basically, I don't.
Think it changes a whole lot about what they're going to do in the market reaction sort of reflects that because they had signaled they were going to do another twenty five basis points because inflation's too high, and though headline inflation in the PCE numbers which they watch came down significantly, it's still more than double what the target is. So the Federal raised twenty five basis points. We did
get as sort of flat reading on personal spending. Consumers spending in March, and the FEDA will have to decide if we're really seeing a whole lot of the previous tightenings that they've done hitting the economy and whether there's a risk that we go into recession or not. So the question will be what they say about what they do next, not so much what they're going to do on Wednesday.
A sidebar here, personal spending is unchanged. Personal income rose. You mentioned personal spending, So what's happening there when the personal income goes up but spending is lower or unchanged.
Well, it's interesting.
As long as incomes are going up, people have the money to spend, and the savings rate went up, so they were socking away some of what they were getting. And there has been a theory that they would start to run out of money because they would have spent down all the stimulus checks they got last year. That hasn't happened yet. But we did see a big rise in spending in January, a smaller rise in February, and now a flat reading for the month of March, which
suggests consumers are pulling back now. Is that because of inflation or just because they bought everything they wanted to back in January.
We don't know.
So we'll be watching the months to come, as will the FED. One thing that happens is we had a late easter this year, and usually that affects spending numbers. They get moved from one month to another. So let's see what happens with April and whether we really have a slow down or whether the FED has more work to do.
Is that what the GDP data told you as well?
Yes, GDP was heavily skewed to improvements in January, and things slowed down as the months went on. GDP also told us that businesses had stopped investing almost and that was a first sign that maybe what the FED has done is starting to have an effect on decision making.
Now, we had a lot of on air guests here at Bloomberg over the week that saw recession signs pretty much everywhere they looked. They are looking at forward data. They claim. The data the FED is looking at is backward looking data. Is there validity to that? What say you, Well, there.
Is validity to it. Most of the data, just by its very nature is backward looking because it's compiled what's already happened. But some of the data that people focus on, including employment, is even more backward looking in the sense that the last thing companies want to do is get rid of people, and that's especially true now after they had a hard time hiring people back after the pandemic. So the last sign you're going to get perhaps of recession is a change in the labor market. That said,
the labor market is still remaining very strong. We'll see next Friday whether we get a strong reading for the April jobs report, But what we've seen in terms of jobless claims, things like that have shown that right now we are not seeing companies back off.
This is your wheelhouse watching everything the FED says and does. Are you noticing any subtle shifts slightly that would tee us up for what they might be thinking about doing next after the meeting?
Not really.
Those who think they should do more have basically said they should do more, people like Jim Bullard of Saint Louis suggesting that we need to go above five and a half to get restrictive enough monetary policy. But most have stayed with the idea that five point one percent as an effective rate, which they put into the dot plot,
is going to be good enough. And five point one as an effective rate would imply that the range would be from five to five and a quarter, So that would mean one more rate increase and then they could decide whether they.
Need any more or not.
And the suspicion, basically among analysts is that we're going to see the FED on hold because they've gotten close enough to a restrictive level and there are concerns about going too far, so they'd like to wait and see what happens in the economy before they get before they would do anything more.
And we are talking with Bloomberg's Michael McKee, our Global Economics and Policy editor, and let's build a little bit about what you were talking about just now. Any sign the FED might be thinking about the split economy, wealthier people doing pretty well, those on the lower end of
the pay scale struggling to make ends meet. We've seen plenty of surveys that show quite a number of people of all ages living hand to mouth, a lot of millennials, by the way, in a recent study that shows that generation gap is growing.
I was going to ask you, can you lend me ten dollars for lunch?
No, the FED would say, there isn't much they can do about it. What they can do is try to set the economic conditions that would provide for maximum employment. Because if you have a job, you have a much better chance of having enough money to at least eat on.
And that was.
Their policy leading up to the pandemic, that they would keep rates low because they wanted to spread the good labor market conditions to those who were at the lower end of the income scale. And coming out of the pandemic, we did see that wages for people on a percentage comparison basis, wages for people at the lower ends went up faster than for people at the higher end. Now that started to change some, but the Fed can't do
a whole lot about it. Their first priority is inflation, so they're going to keep interest rates high, and that will hurt people who would like to borrow and can't afford higher interest rates. So to that extent, there is a problem. But as long as unemployment remains very close to the levels it is now, people are still doing okay. But inflation is a tax, and if you spend most of your money on food or energy, it's gonna really hurt you.
We saw some housing numbers as well this past week. What about the housing market is happening? What's that tell you?
Well, the housing market is usually one of the first and I think this time was as well to respond to higher increase in interest rates, because that's the cost of buying.
A house, is what we pay for your mortgage.
So we did see a real drop off in home sales and a drop in the number of homes that were for sale.
That seems to.
Be starting to turn a little bit, which is hard for the FED to figure out. This has taken a long time for it to play out in the economy. It's a weird post pandemic situation, but we're starting to
see housing be less of a drag. It's not it's not healed, it's not better, it's not a thing you want to go rushing out to invest in, but it is starting to be less of a drag, which could mean good news for the FED because a lot revolves around housing and the economy, not only just the cost of construction and that sort of thing, but also when you buy house, buy new carpets or new furniture or things like that. It can make a big difference when housing is significantly growing.
What's the key factor for you? What piece of data really tells the whole story or does that even exist?
There's nothing that tells the whole story, but I think the things that you're looking at are a combination of the jobs report.
You want to see the economy. What the FED wants.
To see is that we create fewer jobs each month. We want to create enough jobs to give one to everybody who's looking for one, but not so many that we.
Have trouble attracting workers.
And the same time, then we are looking at the inflation data, and you picked your indicator, but basically you want to see inflation continuing to come down month over month, so the progress is being made. Those are the two things that sort of signal what the FED is going
to do and where the economy is now. For the next meeting and a couple of meetings after that, we're also going to be looking at the Senior Loan Officers Survey to see if all the problems that we have had in the banking system turn into lack of credit. If banks pull back on lending because they're nervous about all this, that could hurt the economy. That could slow the economy even more. It could affect what the FED does. They may not feel like they have to raise rates
as high if banks are tightening credit significantly. But we just don't know at this point yet, and that will come out the week after next, so we still have to wait.
That was our Global Economics and Policy editor Michael McKee, coming up on Bloomberg day Break weekend. In the UK, the final preparations are underway for the coronation of King Charles the Third and maybe more. As this is Bloomberg, this is Bloomberg Daybreak weekend, our global look ahead at the top stories for investors in the coming week. I'm
Amy Morris in Washington. Up later in our program. It's not even summer yet, but the November twenty twenty four US presidential election is coming right at us, fast and furious. But first, in the UK, the final preparations are underway for the coronation of King Charles the Third. The event will be marked with a church service and an extra holiday in the UK, and an expected influx of visitors
from around the world. For more, let's head to London and bring in Bloomberg Daybreak Europe anchor Stephen Carroll.
Amy. It's been almost eight months since Queen Elizabeth the Second passed away and King Charles the Third was elevated to the throne. Next weekend, we'll see the formal events marking his coronation, an event that hasn't happened in the UK in seven years. To discuss what is planned, I'm joining Studio Bio UK correspondent Lizzie Burden and by Bloomberg
Pursuits reporter Sarah Rappaport as well. Welcome to you both. Lizzie, can you talk us through exactly what events are planned for the coronation, or at least what we know about them at this stage.
So it's expected to be about half the length and a quarter of the guest list of the Queen Elizabeth's coronation back in nineteen fifty three, so about an hour and a half long and two two hundred guests. You're going to have the service at Westminster Abbey on May the sixth. It'll start about eleven am London time, or
probably precisely. Knowing these kind of events and at the time of recording with you now, the Royal family hasn't officially released the order of service, but we do know that the day begins with the King's procession from Bookingham Palace to Westminster Abbey. You'll likely hear the Archbishop of Canterbury, just In well be presenting the new king to the people and inviting them to say God Save King Charles. Then he'll receive holy communion. He'll be anointed with oil.
Anyone who watches the crown will know that that's the bit that might not be televised because it's holy. It's a tradition that can be traced back to the Old Testament. It symbolizes the divine blessing of the monarch. And you'll be pleased to hear that the oil isn't made anymore of whale's stomach lining as it was in nineteen fifty three. The new recipe is made of oil's harvested.
Green for the new king.
He's under that from the mount of Olives, and they've been pressed just outside Bethlehem. They've been perfumed with essential oils.
Lovely, Okay, Well your painting has the floral picture.
Well, it's not over yet. Then he's going to be invested with his regalia, his crown, his ring, his scepter, and then he'll be crowned by the archbishop, rise from the coronation chair and sit on the throne. And that's usually the point at which the aristocracy would pay homage to him. By touching the crown, kissing his hand. But that bit again is likely to be slimmed down because the number of hereditary pays in the House of Lords,
of course has been cut. And then you'll have the King and the Queen Consort Camilla going back to Bookingham Palace in an even bigger procession than they arrived in. You'll have thousands of armed forces personnel. And then when they get to the palace only the working royals will stand on the balcony for the wave. Should we practice our wave?
Okay, So a lot of preparation clearly has gone into this, and.
Don't forget the Golden State coach.
Very true, very import something to watch out for.
Notoriously uncomfortable.
Right, you haven't been in it, I have.
To say to Buckingham Palace, Lizzie.
So some of the details still yet to be publicly announced, but we do There has been a lot of discussion about who's going to this event.
What do we know.
Yeah, we're expecting an array of foreign royals, heads of state and politicians and that's actually new because previously the ceremony was meant to be between the monarch and their people in the presence of God. But King Charles is said to be inviting the likes of the Sultan of Brunei, the King of Jordan. They're friends of his and it's also a gesture of soft power and diplomacy. You're also
likely to get lots of politicians. Originally we're told it was expected to be about twenty MP's and twenty peers, but the Telegraph newspapers reporting that those numbers have more than doubled now because everybody's been jostling for an invitation, and of course all his life the king has been very involved with charity work. So there'll be lots of representatives of as many causes. But who isn't coming is probably going to get as much attention as who is.
So.
Joe Biden, the US President, has already confirmed that he's sending his wife Jill instead. That's maybe a sign of Britain's diminished place in the world since nineteen fifty three.
The American presidents never go right, I mean, historically they've never been to a coronation. I mean, Jill's going, but it's not as a snob, it's just well, he's been at pain. Look great for American presidents. You're having the way American about to actually got a coronation.
Right, He's been at pains to say that it isn't to snow. Yeah, so that's the official line, and I shouldn't like to descend into royal tittle tuttle Stephen. But even though it's a slimed down version compared to Queen Elizabeth's second coronation, you'll still see almost the whole royal family except the Duchess of Sussex, indeed.
Of which much much ink has been spilled. So, Sarah, those are some of the invited guests. But there's a lot of people who are coming to the UK for this event. This is something that you've been writing about. Tell us about what the expectations are around tourism.
Well, a lot of Americans are coming. Funnily enough, there's a study saying Americans will be outspending Brits by a great deal at London hotels over the long weekend.
Don't you always yes.
But in this case there's more so than usual, by a good eight percent in the data. So they're going to account for thirty two percent of all revenue in London hotels over the coronation weekend. Normally we account for twenty four, so it's a nice, a nice big jump. Okay, you know, Americans don't have a royal family, as we're all aware, maybe the Kardashes or the Kennedys, but not an official royal family. We're going to come. All the
hotels are really jumping on the bandwagon. The Dorchester brought out their nineteen fifty three decour It looks amazing. If you want to go to Park Lane and have a look. All the hotels have more tea than you can Chuck and Buck in Boston, Harbor King themed cocktails, teas, royal stays.
So there's real business in this.
Business, and the hotels are getting booked up. The Goring, which famously Cape Middleton State app before she got married, is fully booked and that's one of the closest hotels to Buckingham Palace. So there's a lot of business in there for tourists and it is largely Americans wanting to come and splash the cash. With the week pound as well, it's easier for them to come and do that.
Should happy to be my flat too?
What about then the offerings that have been put on for toys. You talk about some of the food and drink options. There sarah that that have been laid out for the visitors who are coming, But what about activities? Are the things that are going on in London that people.
Can for a very rich visitors. Royal Salute is launching a twenty five thousand dollars bottle of whiskey for the King Charles, a third edition.
Wow.
I actually went to the launch party was at Westminster Abbey, so an after hours tour. I got to see the place where Charles will be crowned, and out of dinner and tried this whiskey.
Yeah.
I mean it's print on a cards the listed company, right, and they're putting on a King Charles edition. And yeah, twenty five thousand dollars. If you don't have that, there's plenty of other fun places to get cocktails or drinks or do walking tours and get the history right. Because the city's not seen a coronation in seventy years. You don't have to be a royalist to think it's a little bit exciting for a historical event to watch it.
Yeah, and for many people it's a one cent a lifetime chance to be in the city where it's happening.
Most people wereun around the last time there was one.
Indeed, like, broadly speaking, is this expects to be a big boost for UK tourism.
It isn't.
It isn't. UK tourism is actually doing quite well already. There's a lot of pent up demand and like I said about Americans already here, they're aready spending a lot of money.
And Lizzie, let's let's talk a bit about the the backdrop to all of this economically, I mean, could this actually be an important boost to the UK economy.
Well, certain sectors will hopefully get a boost, So UK Hospitality reckons that pubs and restaurants will get a three hundred and fifty million pound boost to sales. But usually on balanced bank quality days actually dent the economy because the extra spending on pubs is worth less than the reduced output in factories, the productive parts of the economy. So last year's Platinum Jubilee bank holiday was estimated to have hit the economy by two point four billion pounds.
But it's really really hard to calculate this stuff, and often you get a bounce back the following month, so you see people catching upon the work they otherwise would have done, so you could say that economic activity is just displaced and not totally lost. And the good news really is that it's not expected to tip us into recession.
Yes, so Drinker.
Indeed, thank you to Bloomberg Pursuits reporter Sayah Rappaport and to our UK correspondent Lizzie Burden. I'm Stephen carolln London. You can catch us every weekday morning here for Bloomberg Daybreak Europe, beginning at six am in London and one am on Wall Street.
Amy, Thank you, Steven, and coming up on Bloomberg day Break. Weekend, we returned to Washington as the battle lines for the twenty twenty four US presidential election are becoming clear. I M. Amy Morris. This is Bloomberg.
Broadcasting live from the Bloomberg It a active Brokers studio in New York. Bloomberg Elemon free oh to Washington, d C, Bloomberg ninety nine one to Boston, Bloomberg one oh six one to San Francisco, Bloomberg nine sixteen to the country, Serrius XM Channel one nineteen to London DAB Digital radio, and around the globe the Bloomberg Business app in Bloomberg Radio Dot com. This is Bloomberg Daybreak Weekend.
I m Amy Morris in Washington with your global look ahead at the top stories for investors in the coming week. The battle lines in the twenty twenty four presidential race are starting to take shape, and we could see more action this coming week. For more, let's head to our Bloomberg ninety nine to one newsroom in Washington and sound on. Co host Kaylee lines.
That's right, Amy, It's only April twenty twenty three, but the twenty twenty four race is already in full swing. We have a number of presidential candidates who have declared that they are running, including finally President Biden. We had long expected it, but he finally announced he is going to seek a second term in a video this past week.
Let's finished this job. I know we can't because this is the United States in area, there's nothing, simply nothing we cannot do.
And as he begins his attempt to try to convince voters to let him finish the job, we're already starting to see the Biden campaign ads roll out.
Joe Biden has made defending our basic freedoms the cause of his presidency. The freedom for women to make their own health care decisions, the freedom for our children to be safe from gun violence, the freedom to vote and have your vote counted, for seniors to live with dignity, and to give every American the freedom that comes with a fair shot at building a good life in small towns and big cities.
The drama of that ad and his potential opponents are out there buying up ads to including former President Trump, who currently is seen as the GOP front runner but is trying to fend off other contenders in the Republican Party like Florida Governor Ron DeSantis, who hasn't even declared that he's running yet. Listen to this Trump ad from this past week.
I thought DeSantis was one of the good ones, but he's just another career politician.
America needs Trump make America great again.
INK is responsible for the content of this advertising.
So buckle up, everyone, because the ads have begun and they're not going to stop for quite some time. Let's get more on this twenty twenty four cycle now with Nancy Cook, who covers all things politics for us here at Bloomberg. Nancy, thanks so much for being with us. I'd like to first start with one of the subjects of that ad. We just heard Florida Governor Ron DeSantis, as I said, he is not yet technically a contender
in this race. But the rumor has always been that once the Florida legislative session wraps up, that's when we'll see him announce. Well, May fifth, I believe, is when we see that adjournment. Could we actually see him announcing within this coming week, I don't think so.
So what has to happen is there's a law on the Florida books that basically says that if you already hold higher office, you have to resign before you can actually run for a different office. And so the Florida Legislature has to tweak this law and they haven't fully finished doing that yet. So they've got to do that before he can actually declare. And I think that we are likely to see him declare, you know, anytime. I
would say between like late May and mid June. And I was told yesterday they're really eyeing like the first two weeks of June, although there is a chance that they could you do Presidential Exploratory Committee before that. He's really under pressure to get into the race because while he hasn't declared, he's been certainly making all the moves for a presidential candidate. He's been to South Carolina, Iowa,
New Hampshire, Nevada. He put out a memoir, He's done a book tour right now, he's in Israel, he just went to Japan. So he's really been making all the moves of a presidential candidate. But because he hasn't declared yet, it's really given of the former president Donald Trump a lot of time to attack him and try to weaken his candidacy before he's even declared. And we've really seen a big drop in the polls from DeSantis in the last three months.
Yeah, and we know that former President Trump's polls numbers have picked up and were aided in a big way by his indictment in the state of New York. And on the subject of Trump, it really does seem like DeSantis is the only one currently that he feels like he's running against in this primary. You don't really see him going after the likes of Nicki Haley or Rick Scott in the same way.
Absolutely so the Republican the polling on the Republican primary field is basically Trump has been leading everything. DeSantis is trailing him. You know, the margins sort of vary and then everybody else. So if if Trump is pulling at like forty six percent, DeSantis, you know, at this point, is pulling at twenty six percent, and then Nicky Haley and Mike Pence and all these other people are really pulling anywhere from like six percent to two percent. You know,
it's really really low. And so the Republican field is interesting because there's a lot of people who have talked about getting in it. You know, New Jersey Governor Chris Christy has talked about getting into it at some point, but he's not in yet. But these other candidates just really haven't gotten traction so far.
Well.
And on this point, after we saw this past week President Biden formally finally entering the race, there was a lot of conversation about how in polls of voters general election preference, is Biden in theory leads Trump. Biden doesn't necessarily, though, lead other potential Republican candidates in the general should they be able to get through the primary.
That's absolutely right. So in polling that we have so far, it shows Biden beating Trump again and again, but DeSantis in some of the polls beats Trump. But the thing that we've seen with Republican primary voters so far is like they're not gauging their desire about who to vote for just against who can beat Biden. They're really gauging it on like Storff, who they like, whose policies they agree with. And I think that what we've seen over the last few months is that Trump really has a
very strong grip on the Republican Party still. You know, people some people hate him, but a ton of people love him, and he has really managed to hold on to this base of roughly thirty percent of Republican primary voters.
And yet he still is ultimately going to have to come out top out on top in the primary race if we are to see a twenty twenty rematch between Trump and Biden. Biden and theory doesn't have to do that, right, He's pretty much guaranteed to be the Democratic nominee. No other major contender has emerged to challenge him. So at what point does the president actually have to start campaigning? What does he do now now that he's announced, What does he do next week the weeks that follow.
So Biden is campaigning so far this week because he's meeting with donors this weekend in Washington to sort of outline the campaign, and some of his senior staff as too. But then what we're expecting him to see is really just just go back to business as usual at the White House for a while. He has the bully pulpit of the White House, you know, he can travel, make speeches from the Rose Garden. These are huge advantages being an incumbent and a reelection campaign, and we're not expecting
his campaign to really heat up until next year. He's just going to continue to govern. He's going to do some foreign trips and just really show the American people that he's working for them. That's the message that they're trying to get out there.
You mentioned donors. We have seen within major Republican donors them start to maybe question who they're going to support, or at least not be putting money directly toward any one candidate. Right now. Does President Biden face that same problem or are all Democratic donors pretty much in line with him?
Well, the Democratic donors that we've talked about Bloomberg are planning to support Biden. I would say that they feel like they didn't get a ton of love from the Biden White House over the past two years, however, and many of them have reservations about Biden's age. He's eighty right now, and they're worried that he will be too old by the end of a second term. However, they're very worried about the threat of a second presidential term
for Trump, and they're going to still support Biden. They're going to open up their pocketbooks.
You know.
They wish there was a little bit more of a charm offensive from the White House, but that's not going to stop them from supporting him.
And as you alluded to, in the meantime, Biden does still have to do the business of being president, and in part that is includes ongoing debate over whether or not he's going to negotiate with Speaker McCarthy at all when it comes to the debt ceiling. Which is why the timing of his announcement struck me this past week, was because you have this ongoing battle that it regards the full faith and credit of the United States, and you pick this moment to say, Hey, I'm running again.
How do you think the dead stealing drama colors this race at this point? Does it at all.
Well, I think it colors the race because what posters keep hearing from Americans is that they are very worried about the economy, and some feel like the economy has even dipped into a recession officially, even though it hasn't.
And so what the dead sealing does is it just means that it puts more pressure on President Biden to solve this problem and the Democrats as well, are the Republicans as well, because if there's a default or even a risk of it, it could really hurt the US economy and that in turn will hurt President Biden's economic message.
Yeah, we'll see what happens between the President and how Speaker Kevin McCarthy, who, by the way, is we're looking ahead to next week, is going to be in Israel on Monday, only the second Speaker of the House to actually visit Israel and address the Knesset. So that's going to be us something interesting to watch in this coming week. And Nancy, we trust that you are going to be watching this all throughout the next year in change until
we actually get to November twenty twenty four. Nancy Cook covers all things politics and the White House for US here at Bloomberg. Thank you so very much, and Amy, I'll send it back to you.
Bloomberg's sound on co host Kaylee Lines, reporting from our Bloomberg ninety nine to one newsroom in Washington. Thank you, Kaylee. Coming up on Bloomberg day Break weekend, decision day for Australia's Central Bank. I'm Amy Morris. This is Bloomberg. This is Bloomberg day Break Weekend. Our global look ahead at the top stories for investors in the coming week. I'm Amy Morris in Washington. The US is not the only country with a big, closely watched central bank meeting this
coming week. For more, we head out to the Pacific region and Daybreak Asia hosts Brian Curtis and Doug Prisner.
Amy, we look full to the Reserve Bank of Australia meeting in the coming week. Inflation is slowing faster than RBA projections, and what that might mean is that the RBA will extend its pause in hiking interest rates.
Gains in the consumer price index slow to a rate of one point four percent in the first quarter of this year. That is down from one point nine percent in the final quarter of last year, and the decline has pushed down the year over year inflation rate to seven percent from seven point eight percent in the prior quarter.
So we have the next meeting to think about and we also hope to get some clarity on some of these recommendations made by the recent independent review of the Central Bank. And joining us now is James McIntyre, Bloomberg Asia Economist. So, James, you've written that it's not just the speed that we're seeing with disinflation, but it's some of the details.
What are some of those details the speed? So you mentioned that seven percent year on year. The IRBI was looking for a seven point four so there's a low starting point for them. But the type of inflation that we're getting now is switching in Australia, so goods inflation has very much fallen away and this is what we were expecting to be happening, that transitory inflation is transiting out. There was still you know, we've still got seven percent
so far, So what's in there. In the quarter that we just had, we had some pretty sizable impacts coming through some numbers in the health side of things. On education,
so especially university fees was a big factor there. We're still getting some domestic and international travel and airfares and accommodation inflation pressures air but all of those things are sort of not the type of inflation that's going to have a central bank wanting to hit the brakes to crimp on demand and to kind of you be concerned about that wages and that cost pressure and that demand full type of inflation. Those factors I mentioned health education,
some of those seasonal or police driven things. So there was a decision some time ago that is now flowing through the inflation data to increase the charges on university students and that's really hit those tertiary fees. Every year, some rebate programs for health expenditures wind off, and that
gives you the inflation bump this time around. So those things are things that you sort of expected but were a little bit higher than normal, and they're baked into that services side of the economy or the services inflation measures.
And when we think globally, that is where we're still seeing these lingering inflation pressures and so sort of thinking and picking up that global inflation zeitgeist, it looks like the Australian inflat services inflation is still a bit high, but a lot of that is administrative or policy driven things, not necessarily something that's a concern for a central bank.
Why do you think it's been the case for the RBA that they were able to pause ahead of some of the other leading central banks what you saw.
With the Central Bank here. We have a monthly meeting schedule at current and let's talk about that might change if the reviews wreck mendations come through from the middle of next year. But they meet monthly. They've been delivering
back to back monthly increases. But one thing that's very interesting about the transmission of monetary policy in Australia, so where the actual policy rate, where the rubber meets the road and where it begins to hit main street on the economy, is that it's much much more effective here in Australia than across a range of other economies. We predominantly have variable rate mortgages, so those floating rates, none of these fifteen or thirty year fixed loans. Australian mortgages
are generally on a floating rate that gets indexed. The changes every month based on changes in the cash rate. And so what we've seen there is we've seen those cash rate moves from the RBA have been linked to a rapid tightening that is vastly far ahead of a range of other central banks when you look at what has actually been hitting consumers and hitting households through that debt servicing cost channel of military policy.
James, thanks so much for your insights. James McIntyre, Bloomberg Asia Economist. I'm Brian Curtis with Doug Christner. You can catch us every weekday here for Bloomberg Daybreak Asia, beginning at six am in Hong Kong and six pm on Wall Street.
Amy all right, thank you Brian and Doug. That does it for this edition of Bloomberg day Break Weekend. Join us again Monday morning, five am Wall Street Time for the latest on markets overseas and the news you need to start your day. I'm Amy Morris. Stay with us. Top stories and global business headlines are coming up right now.