RBA's Ellis says will maintain loose policy for as long as required

Author: Eamonn Sheridan | Category: Central Banks

RBA Ellis, Assistant Gov

  • says to maintain accommodative policy for as long as required
  • now think recovery to be more protracted, progress on unemployment will be slower
  • says more spare capacity in labour market than unemployment rate suggests
  • says monetary and fiscal policy need to pull together
  • says monetary policy measures are working as intended
  • says Victoria lockdown will reduce growth in q3, push out recovery beyond that
  • says expect unemployment rate to continue to rise over rest of this year
  • surprising that government support meant household income has not fallen in aggregate
  • estimates household consumption fell over 10% in first half of year
  • says GDP will probably take several years to return to pre-covid trend path
  • many businesses across Australia have put investment plans on hold
  • spare capacity, sluggish labour costs to put downward pressure on inflation for some time
  • baseline scenario assumes infection rates in Australia subside, no more lockdowns
  • baseline assumes borders remain closed until at least the middle of next year

Headlines via Reuters, bolding mine. Not a lot of optimism from Ellis, given the baseline forecasts that is probably about correct. 

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