RBA: Arguing for an extended easing bias - Rabobank

Michael Every, Head of Financial Markets Research at Rabobank, notes that the RBA’s own post-25bp rate Statement on Monetary Policy showed that it expects CPI to be below 2% for most of the forecast period, arguing for an extended easing bias even with rates at 1.50%.

Key Quotes

“It also flagged “considerable uncertainty” for the housing market. Australia is of course an economy which still needs lower rates if only to bring AUD down from a painful 0.7625 to allow a ‘British-style’ rebalancing. Though it seems only a matter of time until we see rates at 1.00%, the RBA will always have the housing market looming in the background to worry it.”