CE piece on the RBA decision and Lowe's statement yesterday
Major points:
- statement also discussed the risks to growth in the near term from the bushfires and the coronavirus. The RBA appears to be attempting to distance itself from these events.
- upshot is that the Bank would need to see clear evidence that the bushfires or the coronavirus were having a persistent negative impact on economic activity for the Bank to respond.
- we still think the Bank is too optimistic on the outlook for growth
CE conclude:
- the key point is that we doubt the economy will recover as quickly as the RBA expects.
- That's why we think the RBA will be forced to cut rates again before long.
- We forecast the Bank to cut interest rates twice this year with the next cut taking place in April.
