Highlights of the November 4, 2019 RBA decision:
- Prior was 0.75%
- Says to ease policy if needed to support sustainable growth
- Outlook for the Australian economy is little changed from 3 months ago
- Repeats that a gentle turning point appears to have been reached
- Underlying inflation to be a little above 2% in 2021
- Inflation to be close to 2% in 2020
- New home construction has weakened
- Central scenario for economy to grow by around 2.25% this year and then for growth gradually to pick up to around 3% in 2021
- Outlook for the global economy remains reasonable, the risks are tilted to the downside
- RBA points to global developments and spare capacity in the economy
- The Australian dollar is at the lower end of its range over recent times.
- Unemployment to fall to a little below 5% in 2021
- Recent inflation data were broadly as expected
- There are further signs of a turnaround in established housing markets
- it is reasonable to expect that an extended period of low interest rates will be required
In the final paragraph of the statement, the RBA added a sentence to say: "The easing of monetary policy since June is supporting employment and income growth in Australia and a return of inflation to the medium-term target range."
To me, that's a hint that they believe they are done easing for now. They go onto say that they are prepared to ease further if needed but the rest of the statement highlights that much of the downside risks are from abroad.
So the short version here is that they will remain on hold for an extended period unless the US and China blow it all up again; or something else unforeseen happens.
