RBA Gov Lowe: Premature to be considering ending bond buying

Author: Eamonn Sheridan | Category: Central Banks

Philip Lowe, Reserve Bank of Australia Governor speech

  • topic is: From Recovery to Expansion
  • venue is the Australian Farm Institute Conference
Headlines via Reuters 

  • says premature to be considering ceasing bond purchases
  • says bond-buying has lowered funding costs across economy, contributed to lower a$
  • options include another a$100 bln programme, scaling back or spreading out purchases
  • says on 3-year yield target, board has considered range of possible scenarios 
  • in some scenarios conditions for 2024 rate rise could be met, in others not
  • central issue is the probability of cash rate increasing over 3-year window
  • board wants to see recent recovery transition into strong and durable economic growth
  • says economy still in recovery phase, some way to go yet
  • says inflation pressures remain subdued and are likely to remain so
  • says wages growth subdued as firms focus on curbing costs
  • many firms relying on non-wage strategies to retain, attract staff
  • whether households spend their built up savings a major uncertainty
  • says watching build up of household debt, bank lending standards
  • says recent pick-up in business investment is welcome, but fair way to go

Full text is here: From Recovery to Expansion

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