A note from GS with their outlook for the Reserve Bank of Australia.
The bottom line for Goldman is that
- "Absent a steady rise in the unemployment rate over a couple of months (not our base case), rates on hold in 2020 now looks to us the most likely scenario -- particularly given Governor Lowe's renewed concerns around low rates, house prices & financial stability"
Lowe expressed those concerns GS are citing yesterday in his speech. Lowe speaks again on Friday, this time to a parliamentary committee (House of Representatives' Standing Committee on Economics)
GS has downgraded its GDP forecast for Australia, citing bushfire and coronavirus drag in Q1
- to 2.4% (from 2.7%)
- then a quick rebound from Q2
Add that there are risks to their projections, 'skewed to the downside':
- considerable uncertainty
- 2020 GDP could be as weak as 1.7% in a scenario where the rate of new viral infections does not peak until sometime in 2Q2020
