Reserve Bank of Australia Governor Lowe , topic is Delta, the Economy and Monetary Policy
- at the ANIKA Foundation (online event)
Headlines via Reuters
Lowe says Delta outbreak has delayed, not derailed economic recovery
- reiterates cash rate unlikely to rise before 2024 given sluggish wage growth
- says "difficult to understand" why markets pricing in hikes for 2022 and 2023
- says rates might rise in other countries but domestic factors different
- says board judged fiscal policy best response to current delta lockdowns
- little monetary policy could do to offset hit to demand in Q3 and Q4
- says extension in bond buying to Feb reflected delayed recovery
- says the outbreak is a significant setback, an added element of uncertainty
- Q3 GDP likely to shrink by at least 2%, risk contraction could be significantly larger
- unemployment rate could reach "high fives" pct, hours worked fall 3-4% in Q3
- expects economy to be growing again in Q4, recovery continuing into 2022
- spending to be supported by higher savings, boost to household wealth from house prices
- says low interest rates contributing to higher house prices
- housing affordability best not addressed by higher rates or curbs on lending
- says Australia has made significant progress on the vaccination front
- main downside risks are new delta outbreaks, new strains of virus
Bolding above is mine, that's a key takeaway. Nothing new, but Lowe has emphasised 2024 yet again. AUD/USD has lost a few points, not a lot. From circa 0.7370 to around 0.7360 as I update.
There is going to be Q&A following, stay tuned!
Full Text:
---
Preview:
Live audio link:
