Authored by Michael Maharrey via SchiffGold.com,

Silver demand was at record levels in 2022 and there is reason to believe it will continue to run hot over the next several decades. One reason is the rapidly increasing demand for silver in the green energy sector. In fact, an Australian study projects solar cells may use most of the world’s silver reserves by 2050.

Due to its outstanding electrical conductivity, silver is an important element in the production of solar panels. It is used to conduct electrical charges out of the solar cell and into the system. Each solar panel only uses a small amount of silver, but with the demand for solar panels growing exponentially every year, those small amounts of silver add up.

According to a research paper by scientists at the University of New South Wales, solar manufacturers will likely require over 20% of the current annual silver supply by 2027. And by 2050, solar panel production will use approximately 85–98% of the current global silver reserves.

According to data from the Silver Institute, silver offtake for photovoltaics reached a record 113.7 million ounces in 2021. That compares to only 50.5 million ounces in 2013. Final figures aren’t in for 2022, but analysts estimate solar panel production used about 127 million ounces of silver last year.

The paper also noted that more efficient ‘N-type’ technologies now being developed require even more silver than current ‘PERC’ cells that make up more than 80%of the current market.

Some argue demand for silver in solar energy production will eventually flatten as the industry develops cheaper alternatives to the white metal. But according to the paper, even if the industry reduces the use of silver, demand will still increase.

The results show that the current rate of reduction in silver consumption is not sufficient to avoid increasing silver demand from the PV industry and that the transition to high-efficiency technologies including TOPCon (a more advanced N-type silicon cell technology, first scaled in 2019) and SHJ (Silicon heterojunction solar cells, which are very efficient) could greatly increase silver demand, posing price and supply risks.”

Silver possesses the lowest electrical resistance among all metals at standard temperatures. According to a Saxo Bank report in 2020, “Potential substitute metals cannot match silver in terms of energy output per solar panel.”

Further, due to technical hurdles, non-silver PVs tend to be less reliable and have shorter lifespans, presenting serious issues for their widespread commercial development.”

The study said recycling silver also won’t significantly dent supply issues.

Over the longer term, the recycling of older solar modules could provide a significant source of silver. However, further investment and research is needed here, and it may still be several decades before the volume of PV waste processed each year is enough for more than a marginal contribution of new silver.”

In the fall of 2021,  Australia, France, India, the US, and the UK announced the launch of the “One Sun, One World, On-Grid” initiative. The plan is to connect solar energy grids across borders. This could provide a big boost to silver demand.

With billions of government money pouring into renewable energy, the solar industry is somewhat shielded from economic downturns. Even if the economy goes south, governments will continue to fund solar projects and other green energy initiatives. This means the green energy sector will likely drive demand for silver into the foreseeable future.

Two of four Americans kidnapped in a Mexican border town last Friday when their white minivan was ambushed in a shootout were found dead, according to AP News, citing a top Mexican official. The other two were found alive, with one wounded. 

Tamaulipas Gov. Americo Villarreal Anaya said that one of the individuals found alive had been injured in last week’s violent abduction. “Right now, the ambulances and the rest of the security personnel are going to give the corresponding support,” he said, providing few details about the wounded person’s injuries and no information about where the US citizens were found. 

Tamaulipas Attorney General Irving Barrios confirmed the developments in a tweet: 

“Derived from the joint search actions, the four American citizens deprived of their liberty last Friday were found.

“Unfortunately, two lifeless. Investigation and intelligence work continues to capture those responsible.” 

CNN said the group of Americans, traveling from South Carolina to Mexico so one of them could get a medical procedure across the border, were likely abducted at gunpoint in Matamoros, across from Brownsville, Texas, over mistaken identity by Mexican cartel gunmen. 

Latavia “Tay” Washington McGee, 33, drove to Mexico with Shaeed Woodard, Zindell Brown, and their friend Eric Williams for the procedure, but she never made it to her doctor’s appointment on Friday, her mother Barbara Burgess told CNN.

On Sunday, Burgess said she was informed by the FBI that her daughter had been kidnapped and was in danger. “They said, if she calls me, to call them,” she said. –CNN

The kidnapping of the Americans underscores how the immigration policies of the Biden administration have exacerbated the crisis along the US-Mexico border. 

Via Global Macro Monitor,

The so-called lithium triangle Argentina, Chile, and Bolivia account for more than half of global lithium resources, and both Brazil and Argentina have auto-making experience. That could be the basis of a regional electro-mobility platform, she said. 

– Bloomberg

There’s a big push among many resource-producing nations to move down the supply chain, taking advantage of the near- and re-shoring craze. 

Rather than merely supplying the raw materials upstream in the supply chain, for example, the resource producers are looking to move into higher-value-added activities, such as manufacturing batteries, and eventually, the EVs that pack those lithium batteries.

Bloomberg reports that the Chinese carmaker Chery Inc. is looking at building a $400 million EV and battery plant in Argentina to secure Andean lithium supplies, which reflects a global trend by resource-rich nations to move away from just being just merely suppliers of the commodities, the inputs into higher valued added downstream products. 

On average, EV lithium-ion battery packs contain about 9kg of lithium, one thousand times more than most consumer electronics.

Lithium miners have been unable to scale supply to the rapidly growing demand as the electric vehicle market evolves. 

Adding new capacity online can take 3–5 years or more. 

The supply deficit has resulted in a huge spike in the price of lithium. 

Annual lithium demand is expected to reach roughly 3.0 million metric tons of lithium carbonate by 2030, of which EVs could account for over 80 percent of the total demand.

The U.S. Geological Survey (USGS), estimates Mother Earth holds 88 million tonnes of lithium, of which one-quarter is economically viable to mine, known as “reserves.” 

Total reserves of lithium should increase as technology improves. The USGS estimated only 13 million tonnes just a decade ago.

A rough approximation by Popular Mechanics estimates that 22 million tonnes of lithium could produce 2.8 billion EVs 

We smell big supply deficits of lithium for many years to come but innovation, as always, offers us hope. 

Watch this space.

Last month, Pulitzer prize winning journalist Seymour Hersh concluded that the United States blew up the Russia-to-Germany Nord Stream natural gas pipelines last September as part of a covert operation under the guise of the BALTOPS 22 NATO exercise.

Now, four weeks after Hersh’s bombshell report, anonymous US intelligence officials tell the NY Times that the saboteurs are likely ‘pro-Ukraine, possibly government-trained Ukrainian or Russian nationals, or some combination of the two,’ but that ‘no American or British nationals were involved.‘

U.S. officials said that they had no evidence President Volodymyr Zelensky of Ukraine or his top lieutenants were involved in the operation, or that the perpetrators were acting at the direction of any Ukrainian government officials.

…

U.S. officials said there was much they did not know about the perpetrators and their affiliations. The review of newly collected intelligence suggests they were opponents of President Vladimir V. Putin of Russia, but does not specify the members of the group, or who directed or paid for the operation. U.S. officials declined to disclose the nature of the intelligence, how it was obtained or any details of the strength of the evidence it contains. They have said that there are no firm conclusions about it, leaving open the possibility that the operation might have been conducted off the books by a proxy force with connections to the Ukrainian government or its security services. -NY Times

The perpetrators were likely “experienced divers who did not appear to be working for military or intelligence services,” US officials said, adding that “it is possible that the perpetrators received specialized government training in the past.“

According to one European lawmaker briefed late last year by his country’s primary foreign intelligence service, over 1,000 pounds of “military grade” explosives were used.

As a reminder, the pipeline attack came after President Joe Biden telegraphed last year that they would be destroyed.

Pres. Biden: “If Russia invades…then there will be no longer a Nord Stream 2. We will bring an end to it.”

Reporter: “But how will you do that, exactly, since…the project is in Germany’s control?”

Biden: “I promise you, we will be able to do that.” https://t.co/uruQ4F4zM9 pic.twitter.com/4ksDaaU0YC

— ABC News (@ABC) February 7, 2022

While top US diplomat Victoria Nuland celebrated the attack…

At a Senate hearing, top US diplomat Victoria Nuland celebrated the Nord Stream 2 pipeline bombing:

“Senator Cruz, like you, I am, and I think the administration is, very gratified to know that Nord Stream 2 is now, as you like to say, a hunk of metal at the bottom of the sea.” pic.twitter.com/KS5OM4N165

— Aaron Maté (@aaronjmate) January 27, 2023

And a former Polish Minister thanked the US for destroying it in a now-deleted tweet.

‘But it wasn’t us!‘ the US insists.

The Times also notes that the implications of Ukrainian involvement in the attack “whether direct or indirect,” which could “upset the delicate relationship between Ukraine and Germany, souring support among a German public that has swallowed high energy prices in the name of solidarity.”

Since the explosions along the pipelines in September, there has been rampant speculation about what transpired on the sea floor near the Danish island of Bornholm. Poland and Ukraine immediately accused Russia of planting the explosives, but they offered no evidence. Russia, in turn, accused Britain of carrying out the operation — also without evidence. Russia and Britain have denied any involvement in the explosions.

…

Any findings that put blame on Kyiv or Ukrainian proxies could prompt a backlash in Europe and make it harder for the West to maintain a united front in support of Ukraine.

U.S. officials and intelligence agencies acknowledge that they have limited visibility into Ukrainian decision-making. -NYT 

In response, Mikhail Podolyak, adviser to the head of President Zelensky’s office said: “Ukraine has nothing to do with the incident in the Baltic Sea and has no information about “pro-Ukrainian subversive groups.”

New: Ukraine “has nothing to do with the Baltic Sea mishap and has no information about ‘pro-[Ukraine] sabotage groups,'” says Zelensky adviser Mykhailo Podolyak on the report of a pro-Ukraine group being behind Nord Stream sabotage https://t.co/8auIGYzOCW

— Shannon Vavra (@shanvav) March 7, 2023

That said, the report goes on (like three times) to claim that there’s “no evidence so far of the Ukrainian government’s complicity in the attack on the pipelines.”

Further muddying the waters is a report from a European lawmaker briefed late last year about an estimated 45 “ghost ships” that were in the area of the pipeline attack with their location transponders turned off.

The least likely possibility, as usual, is the one that the Western corporate media mindelessly fed everyone immediately: Russia blew up their own pipeline (😂).

Sweden/Denmark are investigating. The Russians are urging release of those results. Yes, let’s see those: https://t.co/IxI31sinmh

— Glenn Greenwald (@ggreenwald) March 7, 2023

The decline in wholesale used-car prices appears temporary as the spring market shifts into gear amid supply woes. 

Cox Automotive reported that its Manheim Used Vehicle Value Index (MUVVI), which tracks the auction prices of used cars, increased 4.3% in February from January, the largest increase for the full month of February since 2009’s 4.4% rise. 

“Used-vehicle prices increased 4.3% in February from January. This was the largest increase for the full month of February since 2009’s 4.4% rise” – Manheim Used Vehicle Index pic.twitter.com/5H9yD3C3H2

— zerohedge (@zerohedge) March 7, 2023

Used-car prices peaked around April 2022 and have been trending slightly lower. But the latest year-over-year change in the data shows a slowing decline and monthly reacceleration in prices — all of this is a troubling sign for the Federal Reserve as January’s economic data was hotter than expected. 

“These figures probably won’t show up in the official data until March (i.e., the figures released in April)… which implies that the glide path to sustainably lower inflation is likely to remain a bumpy one unless core service prices start behaving pronto,” Bloomberg said. 

The increase in wholesale used-car prices in February is also a concern for retail used-car buyers. Prices could accelerate even more (first noted the acceleration last month), aided by tax-return checks this spring. 

Although the supply of new vehicles, greatly affected by a chip shortage and other supply-chain issues in the early days of the virus pandemic, has improved, the lack of new cars pushed many buyers into the used car market… And this has caused:   

“Used-car retail inventories are declining more quickly than we expected,” Chris Frey, senior manager of economic and industry insights at Cox Automotive, warned. 

Last month, automotive expert “CarDealershipGuy” was among the first to point out used car supply woes. He tweeted: 

As my friend @realEstateTrent likes to say, you can learn about it last month on Twitter or today in the news… https://t.co/Fp4oMZA0Ge

— CarDealershipGuy (@GuyDealership) March 7, 2023

Edmunds reports that the average price of a used car this year rose to $28,106, a 38% increase from the average price of $20,409 in January 2020. This is compared to a new car’s average price of $48,000.

Where oh where is this surge in car prices coming from pic.twitter.com/0LjaSgB59P

— zerohedge (@zerohedge) March 7, 2023

Meanwhile, the cost of ownership of a new car is soaring. Price affordability concerns mount as car prices remain high and interest rates surge. We’ve detailed that many Americans have $1,000 monthly payments and might be unable to afford those vehicles as the economy falters. Even used car auto loan interest rates are soaring, the highest in more than a decade. 

Hot used car data is not what the Fed wants to see. 

Authored by Reilly Stephens via RealClear Wire,

The last time your phone asked you to allow this or that app access to your location data, you may have had some trepidation about how much Apple or Google know about you. You may have worried about what might come of that, or read about China’s use of the data to track anti-lockdown protesters. What you probably didn’t realize is Google has already searched your data on behalf of the federal government to see if you were involved with January 6^th.

But last month, the federal district court in DC issued an opinion in the case of one of the many defendants who stands accused of sacking the Capitol in the wake of the 2020 election.

And with it, Judge Rudolph Contreras became the first federal district judge to approve a “Geofence” warrant, endorsing a recent police innovation: searching the cell phone history of every American to check who happened to be in the area of some potential crime.

The “Geofence” in this context refers to cell phone location data collected by Google from users of its Android operating system, as well as iPhone users who use apps such as Google Maps. Location tracking can be turned off, but most users allow it for the convenience of getting directions, tracking their daily jog, or finding the nearest Chipotle. The Government’s warrant demanded location history for every Google account holder within a range of longitude and latitude roughly corresponding to the Capitol building on the afternoon of January 6, 2021, along with similar data from that morning and evening (to filter out Hill staff and security guards).

It’s not clear this information was even needed: This defendant was apprehended within the building that day, carrying knives and pepper spray, and features on various security cameras — his whereabouts are not in question. Many of his coreligionists were considerate enough to live stream their antics themselves. While tracking down every participant in what was dubbed the Beer Belly Putsch is impractical, prosecutors have not lacked for defendants, or for evidence against them. But the government nonetheless decided to resort to a level of mass surveillance without precedent in history or criminal law. This is only the second federal district judge to rule on such a warrant, and the first, in the Eastern District of Virginia, found it “invalid for lack of particularized probable cause” (though that judge declined to suppress the evidence on the basis of other Fourth Amendment loopholes created by the Supreme Court).

That particular requirement comes from the Fourth Amendment itself, which calls for every warrant to “particularly describ[e] the place to be searched, and the persons or things to be seized.” This means that, for instance, the warrant issued last year for former President Trump’s Florida residence did not simply say “search the house,” but detailed specific rooms to be searched for specific things (boxes of documents). The cops can’t — or at least are not supposed to — dump out your underwear drawer based on a tip that you’re hiding cocaine in your basement.

It’s difficult to imagine how a Geofence warrant could ever be particularized in the sense the Fourth Amendment is supposed to require. Traditionally, the government would identify a list of suspects, and then ask the phone company for records specific to them. Geofencing reverses the order of operations: Now the government demands the data of everyone, and only decides which of us is guilty or innocent after invading the privacy of both. In order to find the phones within the Geofence, Google must search their entire repository — if you have a google account, you were searched alongside the perpetrators. It’s difficult to distinguish this approach from the practice that inspired the Fourth Amendment in the first place: the English “general warrants,” which allowed customs officers broad latitude to search any home they liked for smuggled goods.

One might cut Judge Contreras some slack on the basis that the existing Fourth Amendment law he is obliged to apply comes from the era of pay phones and radio transmitters. Traditional doctrine turns on a citizen’s “expectation of privacy,” and holds that there is little such expectation in one’s public movements. This struck a perhaps reasonable balance between privacy and the needs of law enforcement in an era where, if the police wanted to track you, they had to dedicate scarce manpower to maintaining a tail — resource constraints typically restricted surveillance to those reasonably under suspicion.

Over the past decade, the Supreme Court has attempted to grapple with how to apply these principles to modern technology. In Riley v. California, the Court held that unlike pockets and purses, the police cannot automatically search the smartphone of anyone they arrest. The opinion turned on the sheer breadth of material available on our personal devices: one might keep a bit of personal information in one’s purse or wallet, but nothing like what’s a few clicks away on any iPhone: texts, emails, calendars, intimate photos, bank accounts, how many calories the owner has eaten that day and which friends they’ve paid money to in recent weeks for which reasons. The Court held that this new reality required new rules for law enforcement.

A few years later, in Carpenter v. United States, the Supreme Court addressed the use of Cell Site Location Information, the phone company’s record of which cell towers you phone connects to. This data provides a rough approximation of your whereabouts, but without the precision of Google’s location data — a given cell tower narrows your location down to a couple blocks, whereas Google’s estimated margin of error averages closer to 100 meters. The Supreme Court said that Cell Site data requires a warrant, a break from existing law which held one could not expect privacy in one’s public whereabouts. And the cops in Carpenter had identified a specific phone belonging to their suspect and match its locations to a string of robberies — they hadn’t asked Verizon to track every phone in Michigan and Ohio.

One need not have sympathy for the QAnon shamans and oath-breakers to judge that this sort of digital dragnet empowers law enforcement in new and often frightening ways. The Fourth Amendment protects the rights of the accused in criminal prosecutions, and denying those protections to the guilty will ultimately harm the innocent. Police could demand location data for every phone brought to a BlackLivesMatter rally, or an NRA convention; they could identify every woman who visits an abortion clinic, or attends the March for Life.

Federal criminal law has metastasized to the point where the average person probably commits multiple federal crimes on the average day — which of us is prosecuted depends mostly on the priorities and caprice of law enforcement. If you want a vision of the future, imagine your phone ratting you out to the cops, forever.

Reilly Stephens is a Staff Attorney at Liberty Justice Center.

The former head of the Biden administration’s short-lived Disinformation Governance Board, Nina Jankowicz, was slapped with a subpoena by the House Judiciary Committee on Monday.

Jankowicz, a huge fan of disinformation peddler Christopher Steele who cast doubt on the Hunter Biden laptop story, resigned from her position last May after the DHS ‘paused’ the disinfo organization. She previously served as a disinformation fellow at the Wilson Center, and advised the Ukrainian Foreign Ministry as part of the Fulbright-Clinton Public Policy Fellowship. She also oversaw the Russia and Belarus programs at the National Democratic Institute.

Jankowicz also makes creepy Disney-themed songs in a fake British accent, leading to the nickname “Scary Poppins.”

🤡🌎 Biden’s head of the new “Disinformation Governance Board” pic.twitter.com/RZqILqT18c

— Clown World Today 🤡🌎 (@cwt_news) April 29, 2022

The former ‘disinfo czar’ has been ducking requests from the House Committee for months.

“We have repeatedly sought information from you concerning your official actions and duties as a DHS employee and former Executive Director of the Board, including how the Board intended to define disinformation, how it planned to collect information and from what sources, how it anticipated countering disinformation, and how it proposed to protect First Amendment rights,” Chairman Jim Jordan (R-OH) wrote in a letter to Jankowicz. “To date, however, you have declined to comply voluntarily with our request for a transcribed interview.”

#NEW: @Jim_Jordan subpoenas Nina Jankowicz.

Compels her to appear for a deposition relating to Joe Biden’s failed “Disinformation Governance Board.” pic.twitter.com/MzClswwHhV

— Weaponization Committee (@Weaponization) March 6, 2023

According to documents revealed by Sens. Josh Hawley (R-MO) and Chuck Grassley (R-IA), the Disinformation Governance Board would have an expansive reach despite DHS Secretary Alejandro Mayorkas’ claim that the board would “not infringe on free speech… civil rights [or] civil liberties.”

Biden administration officials expressed particular concern about “conspiracy theories about the validity and security of elections,” “disinformation related to the origins and effects of COVID-19 vaccines or the efficacy of masks,” and “falsehoods surrounding U.S. government immigration policy,” in one document released by the senators.

Republican elected officials also expressed concern with DHS’s decision to tap Jankowicz to lead the board. A former fellow at the Woodrow Wilson International Center for Scholars, Jankowicz repeatedly accused GOP officials and activists of spreading disinformation. She claimed that opponents of Critical Race Theory are  engaging in “disinformation for profit,” and that Hunter Biden’s laptop was a Republican “campaign product.” -Daily Caller

“There’s never been any indication that Hunter Biden was involved in anything untoward,” she said of Hunter Biden’s lucrative position on the board of Ukrainian energy giant Burisma.”It certainly has nothing to do with Joe Biden’s policies toward Ukraine.”

Oh?

By Greg Hunter’s USAWatchdog.com,

Catherine Austin Fitts (CAF), Publisher of The Solari Report, financial expert and former Assistant Secretary of Housing (Bush 41 Admin.), says the Central Bank Digital Currency (CBDC) is much easier said than done.  There is a monster fight behind the scenes between commercial banks and central banks. 

CAF explains, “You have bubbled an entire economy, and now you are bringing out something (CBDC) that could shrink the bubble dramatically, and it can put a lot of banks out of the game and out of the business…”

“If the central banks are going to compete directly for retail accounts, it’s going to shrink the fees and business for a lot of banks.  You are talking about cutting their income or putting them out of business.  So, CBDC is highly controversial.  One reason is people are beginning to wake up and realize, oh, I am no longer an insider.  CBDC is going to turn me into a slave, and they are going to be able to take all my assets.  You think they could lock you down during the pandemic?  The CBDC is the ultimate lockdown tool, and they can lock anyone down whenever they feel like it.”

The Fed’s biggest fear is losing control of the financial system.  CAF says,

“The Fed is scared to death of the global debt growth model, and they kept this model going by growing the debt more and more and more.  Now, interest rates are accelerating in a way . . . it shrinks your productivity.  So, the pie that is supporting the debt, is shrinking….

This is a coup model just like in Ukraine.  You push all the people out or you kill them.  You have war conditions so you can pick everything up cheap.  You can do this with government money to ‘help’ Ukraine.  No, it  is government money to help the insiders to buy Ukraine, control Ukraine, own Ukraine.”

CAF says if you want to fight against the CBDC, then start spending cash every day instead of electronic payments.  CAF started with “Spend cash on Friday,” and it took off.  CAF says,

“Cash Friday became cash every day.  You know why?  It was so successful.  We get these incredible stories… hundreds and hundreds of stories of people starting to engage with their local businesses about what are we going to do about all of this?  It starts with cash because businesses pay 3% on their credit card fees. . . . This can be the difference between making a profit or a loss if everybody pays cash.”

CAF also talks about more ways coming where you can pay in gold and silver coins.  CAF tells us why gold and silver should be core investments and why she likes silver more than gold.  CAF tells us why she is not worried about the threat of nuclear war, what the NATO plan is for Russia and why it’s backfiring. 

CAF also talks about why the Second Amendment is the biggest block to digital currency prison and why she thinks “2023 is a pivotal year for freedom and opportunity.”

There is much more in the 55-minute interview.

Join Greg Hunter of USAWatchdog.com as he goes One-on-One with the Publisher of The Solari Report, Catherine Austin Fitts for 3.4.23.

To Donate to USAWatchdog.com Click Here

There is much free information on Solari.com.  You can search for all the free information CAF talked about by using the search box in the upper right-hand corner on the homepage of Solari.com.

A new nationwide study from the Trafalgar Group and Convention of States Action (COSA) reveals that 43.4 percent of US voters believe the country is on the brink of World War III, considering the war in Ukraine, perceived threats against other European nations, and China’s aggressive posture against the US.

30.3% of those polled do not believe we’re on the brink of another world war, while 26.3% are not sure.

The poll was conducted between Feb 22nd through Feb 26, before USAID head Samantha Power admitted that the US is at war with Russia but that it’s “Ukrainians doing the fighting.”

And then there’s this:

Step by step, the people of the UK are being prepared for war.

“Britain should engage directly in war against Russia ,we are at war in Europe, we need to move to martial law”

-Tobias Ellwood, head of the British parliament’s defence committee. pic.twitter.com/3hARXB3Xz0

— Richard (@ricwe123) March 6, 2023

When broken down by party, just 26.4% of Democrats think WWIII is imminent, while 56.7% of Republicans, and 47% of independent voters believe we are on the brink of WWIII.

“While the Biden Administration and its allies in corporate media continue to downplay the existential threat posed by China, Russia, Iran, and other enemies of the free world, the American people see clearly that we are at a moment of unprecedented risk for our nation and the world. Our weakness and incompetence–on the border, on energy policy, and on our approach to China–are increasing the risk of international armed conflict in a highly-nuclearized age,” said Convention of States President, Mark Meckler.

China’s new foreign minister, meanwhile, says the United States is heading for “conflict and confrontation” with Beijing, and that Washington needs to change its “distorted” attitude towards China.

“If the United States does not hit the brakes, and continues to speed down the wrong path, no amount of guardrails can prevent derailment, which will become conflict and confrontation,” said Qin Gang. “And who will bear the catastrophic consequences?“

Overnight, the RBA increased the cash rate for the 10th consecutive time by +25bp to 3.60% at March’s Board meeting – the highest level since May 2012 and in line with expectations.

While the statement maintained a clear hawkish bias, noting that the Board “expects that further tightening of monetary policy will be needed”, the tightening bias was notably softer than February’s alongside the RBA’s observation that “labour market conditions have eased a little”, the risk of a price-wage spiral has lessened, and inflation has likely peaked.

According to Goldman analysts, today’s statement provides the RBA some optionality to pause the tightening cycle in the event that the recent weakness in the monthly labor force reports is sustained. That said, Goldman expects a solid rebound in next week’s employment data as unusually large seasonal distortions unwind. Ultimately, with the unemployment rate near a 50-year low, inflation far above target, substantial excess savings supporting household balance sheets, and the Fed Funds rate likely to rise to 5.25-5.50% – the bank believes that a materially higher RBA cash rate will likely be required to bring inflation back to target on a credible timeframe.

Governor Philip Lowe said in his statement that in assessing “when and how much further” rates need to go up, the RBA will pay close attention to incoming economic data.

Looking forward, Goldman expects the RBA to raise the cash rate +25bp in April and May to a terminal rate of 4.1% – with the risks skewed to a more elongated tightening cycle to a higher terminal rate.

Main Points from the RBA statement:

• The RBA increased the cash rate +25bp to 3.6% at March’s Board meeting, in line with expectations (31/31 forecasters surveyed by Bloomberg expected +25bp, including GS). The attending statement reiterated the Board’s priority “is to return inflation to target… if high inflation were to become entrenched in people’s expectations, it would be very costly to reduce later”, but also maintained it wanted to keep the economy “on an even keel”.
• The forward guidance in the final paragraph noted the Board “expects that further tightening of monetary policy will be needed”, a marginally more ambiguous statement compared to the previous guidance (“expects that further increases in interest rates will be needed over the months ahead”). The Board also added the words “when and” to the final sentence “in assessing when and how much further interest rates need to increase, the Board will be paying close attention to developments in the global economy, trends in household spending and the outlook for inflation and the labour market.” We viewed this as increasing the Board’s optionality around the timing of future hikes, including the option of a pause, in addition the magnitude of future hikes.
• On the domestic economy, the RBA’s comments were incrementally more dovish than the prior month on several fronts. The statement noted that growth in the Australian economy “has slowed”, as did household consumption growth “due to tighter financial conditions”, while the outlook for housing construction “has softened”.
• On the labour market, the RBA characterized conditions as “very tight” overall but noted they “have eased a little”, although it caveated that the weakness in January’s employment data “partly reflects changing seasonal patterns in labour hiring”.
• On wage growth, the RBA noted “at the aggregate level, wages growth is still consistent with the inflation target and recent data suggest a lower risk of a cycle in which prices and wages chase one another”, although it noted “the Board… remains alert to the risk of a prices-wages spiral”.
• On inflation, the RBA noted “the monthly CPI indicator suggests that inflation has peaked in Australia. Goods price inflation is expected to moderate over the months ahead due to both global developments and softer demand in Australia. Services price inflation remains high, with strong demand for some services over the summer”. Going forward the RBA continues to expect inflation to “decline this year and next” to be “around 3 per cent in mid-2025”.

The market clearly took the RBA statement as far more dovish than Goldman, and the AUD sold off after what was seen as a dovish hike, the currency sliding more than 1.1% on Tuesday.