Beyond Bulls & Bears

Why Australia May Not Join the Rate-Tightening Party
Fixed Income

Why Australia May Not Join the Rate-Tightening Party

“We don’t think the RBA is likely to raise rates in the next 12-18 months. There is a heavy load on the shoulders of Australian households. Australia’s economy is benefiting from global growth, particularly in China, but that growth would have to be quite significant to reduce household debt or improve wage growth. If these issues don’t improve in the next year or so, we believe the RBA’s next course of action could be a rate cut.” – Chris Siniakov and Andrew Canobi, Australia Fixed Income team

Australia: Too Much Reserve on Interest Rates?

Australia: Too Much Reserve on Interest Rates?

In our view, the Reserve Bank of Australia would prefer not to lower interest rates from the 2% level unless conditions deteriorate and warrant further stimulus.