Via the Australian Financial Review comes this on the Reserve Bank of Australia
Goldman Sachs says RBA modelling is that -1% cash rate would be needed to hit inflation and unemployment goals, but the RBA is reluctant to use negative rates.
Hence
- "we estimate that an equivalent degree of stimulus could be approximated by a $200bn QE program"
- "We continue to see a material risk that the RBA will deliver even deeper rate cuts and be drawn into unconventional policies"
- "For now, however, this remains outside our central scenario given Governor Lowe's concerns about financial stability risks from loose monetary policy."
Link for more, Australian Financial Review may be gated
