I’ve been posting up comments from Glen Stevens all morning … he fronted parliament’s House of Representatives’ Standing Committee on Economics and it’s a 3-hour long gig. Here’s the headlines etc., all in one place, with links to the original posts should you require. Interesting he didn’t do that much jawboning on the AUD:
1. RBA governor Stevens:
- Sees period of stability for rates
- AUD still high by historical standards
- Fed tapering proceeding as well as can be expected
- Monetary policy is playing its part in supporting growth
- Forecasts for global economy, if anything, have inched higher
- House building set to rise strongly
- Recent GDP data have not significantly change view of below trend growth
- Monetary policy very accommodative
- Inflation not rising as fast as the data would suggest
- Dwelling investment will rise strongly in period ahead
- Expects consumer spending to grow in line with income
- Labour market to remain soft for a while yet
- Non-resource capex bound to pick up at some stage
Here is the full text of his opening statement:
Glenn Stevens, Governor: Opening Statement to House of Representatives Standing Committee on Economics
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2. More from RBA governor Stevens:
- Hopeful unemployment will not rise too much further
- unemployment rate will likely rise a little further yet
- Estimates unemployment lags growth by one to two quarters
- Potential growth rate of economy is 3% or a touch more
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3. Stevens firing off warning shots to property investors now:
- household debt pretty high
- asking for trouble if household debt steps up
- people need to be aware home prices can also decline
Adds:
- Federal Reserve not likely to raise rates until late in 2015
And:
- Biggest threat to housing affordability is price surge
- Does not know how long rates stability will be
- Does not see need for lower rates at the moment
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- Currency jawboning has limited effects
- Sees pick up in non-mining industries occuring
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5. Christopher Kent’s turn in the spotlight now:
- Sees unemployment peaking in early 2015
- Growth may be too slow to lessen unemployment for some time to come
- Capex misses about half of non-mining investment
- RBA liasons suggest businesses are still cautious on investment
Christopher Kent is the Assistant Governor (Economic) at the Reserve Bank of Australia, responsible for the Bank’s Economic Analysis and Economic Research Departments and is the chief economic advisor to the Governor and the Board
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6. RBA Stevens:
- Australian dollar over 0.9 is higher than RBA’s assessment
- But has nothing further to say on AUD
More from Stevens:
- Central bank diversification has been a factor for AUD
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7. RBA Stevens still going:
- Macro-prudential tools may be a useful adjunct
- Is cautious on implementing
- Most effective tool may be stricter bank loan tests
Deputy governor Lowe:
- Macro-prudential tools can create costly distortions
- Unlikely to be a silver bullet
Philip Lowe is the Deputy Governor of the Reserve Bank of Australia, also Deputy Chairman of the Reserve Bank Board, and is Chairman of the Reserve Bank’s Risk Management Committee.
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