Reserve Bank of Australia Governor Lowe

  • Says a 4% cash rate by year end - "I don't think it's particularly likely"
  • says it would have a first order impact on the economy

(i.e. he means by 'first order' that it would sharply slow down the economy)

Lowe dismissing market pricing of a 4% cash rate by end of year. Lowe goes on to say that the market has done a better job on rate pricing than the Bank has. Which is true, the Bank's projections have been awful. The 4% year-end rate is also a bit silly though, markets are not always correct either.


  • is still wanting to see annual wage growth of 3.5%
  • ongoing wage growth in a 4 to 5 % range would make it harder to get inflation down