Q+A: The Week Ahead | 4 May 2026
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What are the key economic events happening this week?
Welcome to Fear and Greed Q&A, where we ask and answer questions about business, investing, economics, politics, and more. I'm Michael Thompson, and every Monday morning, we're joined by economist Stephen Koukoulis to look at the week ahead. You'll find him at thekouk.com, that's T-H-E-K-O-U-K.com, and sharing his views and analysis on LinkedIn as well. Stephen, good morning. Very good morning, Michael, and what a week we've got. What a massive week. Do you lose sleep on a weekend leading into this kind of thing? Because a week like this is a bumper week, right? You've got the RBA meeting today and tomorrow. We've got some other bits and pieces, household spending, building approvals.
How does the RBA's meeting impact interest rates?
But really, the RBA, and when it's such a big and much anticipated meeting, there is... There is so much riding on this one, right?
So much riding on it. Now, I don't lose sleep, but because it's one of these things, it's an evolving analysis that from the last meeting, which is now eight weeks ago, it's a long time since the last RBA meeting, we've had so much news. And with each bit of news from the international economy and international geopolitics, plus our own domestic data here, You think they might hike a bit more, they might not. Oh, yes, they will. Oh, maybe they won't now. And so you get this evolution of ideas coming through from news and events. And that's what makes it so interesting. And right now... The troubling thing that our friends at the Reserve Bank Monetary Policy Board meeting today and tomorrow will be confronting is a real checkerboard of news.
On inflation, you would hike. On the growth outlook and the risk for unemployment, you'd pause. And that's where sensible people can have a really hearty discussion. The end point will be a really difficult decision to make, whatever they do.
Well, let's look at one of the big pieces of information that they will be taking into account, and that is the March quarter inflation figures that we received last week. week, right? And the timing of this meeting has worked well, right? Because in the past, we've had kind of where it's just slightly out of alignment. The RBA meeting is just before the release of info, but at least in this particular case, they've got this heading into it. What did you make of the CPI data from last week? Yeah, it's one of those ones where
If you're expecting to get punched in the nose three times, you're going to get punched in the nose twice. It's a good outcome. So we had that punch in the nose from the inflation numbers. They were high, unambiguously. The petrol effect was there in the headline figure. So the annual growth of 4.6%. Yeah, that's really high. But a full percentage point of that was just petrol. And so that was the shock that we've been talking about and it's volatile and it's probably going to be down in the month of April when we get those numbers in a month's time. So what we are focusing on, I think what the board will focus on too, the RBA, is the trimmed means. So you take out all these volatile items and there's a legitimate case to take out petrol because just as quickly it's gone up the last couple of months, it could well come down.
So you don't necessarily hike because of that. However... The trimmed mean or the underlying inflation rate, which focuses on the core part of the inflation pressures that are driven by economic conditions, is still above the target. It was still 3.3% and the target's 2.5%. And... On that particular number, that's why there's such a high probability, not a certainty, but a high probability that they do hike and announce the rate hike tomorrow afternoon.
So how much of this then in terms of those figures from last week – non-war related increases in terms of where are we seeing those price pressures? Where are we seeing inflation that isn't necessarily related to the war? Because we were already heading in this direction before the war started.
And that's a really good point. And it's interesting, that's why the RBA hiked in February and March, just by the way.
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