Economists at Morgan Stanley said that the Bank of Australia's next interest rate move may be to lower interest rates. With inflation still the Bank of Australia's primary focus, they expect the Bank of Australia's rhetoric to remain relatively tight over the next few months, while keeping interest rates unchanged amidst signs of rising core inflation and slowing domestic demand. They believe that the central bank will act only when one of these trends changes. Morgan Stanley's view is that inflation is most likely to fall, but this will only happen if the scope of the housing market slowdown widens, thereby affecting labor conditions and prices.

Economists at Morgan Stanley said that the Bank of Australia's next interest rate move may be to lower interest rates. With inflation still the Bank of Australia's primary focus, they expect the Bank of Australia's rhetoric to remain relatively tight over the next few months, while keeping interest rates unchanged amidst signs of rising core inflation and slowing domestic demand. They believe that the central bank will act only when one of these trends changes. Morgan Stanley's view is that inflation is most likely to fall, but this will only happen if the scope of the housing market slowdown widens, thereby affecting labor conditions and prices.