AMP Capital Head of Investment Strategy and Chief Economist Dr. Shane Oliver
"There is some risk the Reserve Bank might have to cut interest rates again," says Oliver. "We are seeing home prices come off again in Sydney and Melbourne and obviously that will have a negative wealth effect."
"If that gathers pace, and there is a risk there with the tightening of bank lending standards, then that might force the Reserve Bank's hand into actually cutting again, because the tightening in lending standards is a defacto monetary tightening," Oliver says.
I can't think that Oliver's view is controversial, but it is counter to prevailing consensus. Most analysts are looking for the next interest rate move from the RBA to be up … although they do keep putting the timing further into the future.
Oliver's piece date June 12.
