After Glenn Stevens’ speaking engagement yesterday and his impact on the AUD there are a few press pieces around. Some interesting points.
Money markets predict central bank Governor Glenn Stevens will hold Australia’s cash rate steady for at least a year. History suggests he’ll spring a surprise.
- Stevens has either raised or cut the benchmark rate 26 times since he took the boss job in September 2006, the most among major developed-world peers
(OIS has the chance of a 25 basis point rate cut at 6% at the next RBA meeting)
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Also, from the Australian Financial Review (gated):
The Reserve Bank of Australia should have stopped cutting official interest rates at least 12 months ago, said a prominent former board member
- Opinions from Australian National University economist Warwick McKibbin (who left the board last year)
“I would have stopped at 3 per cent or 3.5 per cent”
Mr Smith said Mr Stevens may not be able to raise borrowing costs to cool the housing market without spurring the dollar. “I would probably be saying the same thing . . . which is talk the market down,” Mr Smith said.
