Quarterly publication from the Reserve Bank of Australia, the Statement on Monetary Policy (SoMP)

Full text here:

Headlines via Reuters

  • Board prepared to ease policy if needed, watching labour market closely
  • reasonable to expect extended period of low interest rates
  • near-term risks to economic growth are more to the downside
  • economic forecasts include technical assumption rates will move in line with market pricing
  • market pricing a cut to 0.75% by year-end, further cut to 0.5% in h1 2020
  • GDP forecast for Dec 2019 to 2.5%, Dec 2020 stays at 2.75%, June 2021 raised to 3%
  • sees underlying inflation at 1.5% Dec 2019, 1.75% Dec 2020, 2% for both June 2021 and Dec 2021
  • raises unemployment forecast to 5.25% for both Dec 2019 and Dec 2020, sees 5% for Dec 2021
  • leading indicators suggest jobs growth could moderate by more than forecast
  • trims outlook for wages growth, now seen stable over the year ahead
  • risk dwelling investment will decline by more than forecast, but recover earlier
  • says more spare capacity in the economy than previously thought
  • says A$ has fallen in line with domestic bond yields, at lowest level of recent times
  • number of upside risks in medium term including housing market, mining activity
  • housing market appears to have stabilised earlier than previously expected
  • data suggests GDP growth in q2 was "reasonable"
  • cuts forecasts for global growth due to China - US trade dispute, weak business investment
  • potential for further escalation in trade dispute increases downside risks to growth

Bolding above is mine. The RBA forecasting higher unemployment, moving away from the 4.5% they want. Rates to stay lower for longer folks.

Meanwhile, Governor lowe has been speaking in parliament today: