RBA Governor: Interest Rates May Continue To Fall

In front of a parliamentary committee, the Governor of the RBA has said this week that lowering interest rates is still on the RBA's agenda. Read through the Greenspan-like obfuscation, its an interesting statement.

http://www.news.com.au/national/res...uld-fall-further/story-fncynjr2-1226785630821

INTEREST rates could come down further, with Reserve Bank Governor Glenn Stevens indicating the central bank has an "open mind" about further shifts on monetary policy.Fronting a parliamentary committee in Canberra this morning Mr Stevens said the economic year had not been as good as the RBA had hoped, but not as bad as it could possibly have been.

He said it was not out of the question that the official cash rate could come down further from the current 2.5 per cent. "The board has an open mind about whether need to lower interest rates further," Mr Stevens said.
'Monetary policy can't force spending' ... Reserve Bank Governor Glenn Stevens. Picture: ...?Monetary policy can?t force spending? ...

Mr Stevens said that mining investment had "reached its peak" but that there was a concern that non-mining investment was still at a "low ebb".
 
Most people take the words "Monetary policy can't force spending", to mean that it is highly unlikely that rates will fall further. If the exchange rate stabilises where it is then there would be little point in lowering rates as the reason for the last drops in interest rates was to help stop the dollar rising further. Lowering rates hasn't increased consumer demand, so they feel lowering them even further wouldn't either.
 
Lots of folk see Australia's wealth going down the gurgler in the near future so I'm staying variable. I personally think that property is is highly priced in general and is placing a cap on further growth for some time to come. Still holding all I have but not optimistic about quick capital gains is all. It'll come, but property is long term.
 
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