Reserve Bank of Australia Governor Lowe is speaking on The Recovery, Investment and Monetary Policy
- the venue is the Australian Financial Review Business Summit, Sydney
Full text: The Recovery, Investment and Monetary Policy
Headlines via Reuters
- says rates to stay at 0.1% until actual inflation in 2-3% band
- noting market expectation of rate rises in 2022, 2023 says "this is not an expectation we share"
- says unlikely to see wages growth consistent with inflation target before 2024
- says want to achieve maximum possible sustainable level of employment
- says possible can sustain an unemployment rate in the low 4s
- not considering removing 3-yr yield target or changing from 10 bps
- says still considering whether to move from April 2024 bond to Nov 2024
- later in year, board will consider case for further extending bond purchase program
- understandable global bond yields moved off historic lows given improving outlook
- yields suggest investors more confidence that policy measures will work to lift inflation
- says this is good news, though expected inflation still not above our target
- says Australia within striking distance of recovering pre-pandemic level of output
- says recovery in employment has been "v-shaped"
- recovery still has long way to go, economy operating well short of full capacity
- says business investment lagging, strong and sustained pick-up needed
This is meaty stuff from Lowe, he is reiterating current policy and adding that more can be done if possible. Lowe is basing his forecasts on RBA projections. RBA projections do not have a good track record.
