Australia’s Reserve Bank no longer says it is patient, but it is unlikely to move move until it sees widespread higher wage growth.
Articles on Cash rate
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Beware any advice to go either fixed or variable. You are unlikely to outsmart the bank.
The Conversation’s expert panel predicts prices will rise faster than Australians’ pay can keep up in 2022 – and that’s not their only concern about the local economy.
The 55 leading economists surveyed by the Economic Society see few signs of Australia aping the US, where inflation has surged to its highest level in 30 years.
In its quarterly statement on the economy the Bank is at pains to suggest it won’t be lifting interest rates quickly.
The Reserve Bank has limitless access to Australian dollars and a reputation to protect.
There’s more to that Coronavirus. Even before it, businesses weren’t keen to invest.
The Conversation’s 2020 economic survey points to a dismal year, with no progress on many of the key measures that matter for Australians and an increase in the unemployment rate.
Treasury Secretary Steven Kennedy says its up to the Reserve Bank to boost the economy. In normal times, that’s not his job.
Evidence for the prime minister’s contention that the banks are “profiteering” is thin on the ground.
The Reserve Bank’s best case scenario is that its forecasts are wrong.
The Reserve Bank has cut the official interest rate to a new low of 1%, reflecting continuing concern over the slow economy.
By himself, Reserve Bank Governor Philip Lowe may not be able to keep us out of recession.
The Conversation’s distinguished panel predicts unusually weak growth, dismal spending, no improvement in either unemployment or wage growth, and an increased chance of recession.
Expect two more interest rate cuts, but they mightn’t be enough.
Rates might need to be cut urgently, and because things are good. Governor Lowe has signalled he won’t wait.
The Reserve Bank’s inflation target seems out of date in a world of ultra low inflation. So why is Governor Lowe persisting with it?
The Conversation has assembled a forecasting team of 19 academic economists from 12 universities across six states. Together, they assign a 25% probability to a recession within two years.
Reserve Bank of Australia governor Philip Lowe has effectively ruled out an interest rate rise until wage growth tops 3%.
While the RBA might not be able to influence the current cash rate, it can still influence longer-term rates by offering guidance about its future policy decisions.
Top contributors
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Visiting Fellow, Crawford School of Public Policy, Australian National University
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Scientia Professor of Economics, UNSW
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Associate Professor, Research School of Economics, and Research Associate, Centre for Applied Macroeconomic Analysis, Australian National University
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Senior lecturer, Canberra School of Government, University of Canberra
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Professor, Warwick Business School, University of Warwick
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Professorial Fellow, University of Canberra
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Vice-Chancellor’s Fellow, University of Tasmania
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Lecturer in Economics, Monash University
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Professor, School of Economics, The University of Queensland
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Emeritus Professor of Finance, The University of Melbourne
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Honorary Associate Professor in the School of History, Research School of Social Sciences, Australian National University
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Professor of Macroeconomics, University of Sydney
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Visiting Fellow, Macquarie University Applied Finance Centre, Macquarie University
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Industry Professor, University of Technology Sydney
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Director, Bankwest Curtin Economics Centre (BCEC) and John Curtin Distinguished Professor at Curtin Business School, Curtin University