RBA governor Lowe says rates to remain low for an extended period

Author: Eamonn Sheridan | Category: Central Banks

Reserve Bank of Australia governor Lowe speaking before the House of Representatives' Standing Committee on Economics from prepared text

Some of the main points from the text:
  • Australian economy to expand by 2-1/2 this year
  • downward revision this year reflects weak consumption growth
  • signs economy may have reached "gentle turning point"
  • expecting qrtly GDP growth to increase gradually
  • major uncertainty trade dispute between US and China
  • we have a lot riding on these disputes being resolved
  • central scenario for the unemployment rate to move lower to reach 5% again in 2021
  • probable that we will still have spare capacity in the labour market for a while yet
  • my view is that a further pick-up in wages growth is both affordable and desirable
  • inflation still expected to pick up, but the date at which it is expected to be back at 2% has been pushed out again
  • over 2020, inflation is forecast to be a little under 2% and over 2021 it is expected to be a little above 2%
  • easier monetary policy mainly works through affecting exchange rate, disposable income
  • having cut rates twice in quick succession thought appropriate to wait and assess developments
  • reasonable to expect an extended period of low interest rates in Australia
  • this reflects what is happening both overseas and here at home
  • difficult to escape the fact that if global interest rates are low, they are going to be low here in Australia too
  • RBA board is prepared to ease monetary policy further to meet inflation, employment goals
  • monetary policy is not the country's only option
I bolded a few of those above, nothing surprising at all. 

There will be Q&A to follow, which be more interesting 

ps. The link to a live feed is here (scroll down a bit) 

Full text of his prepared remarks here:
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Reserve Bank of Australia governor Lowe speaking before the House of Representatives' Standing Committee on Economics from prepared text

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