Yesterday’s RBA activity has begun the oil tanker’s swing towards rate cuts. The day began with the leak that the RBA is so concerned about royal commission fallout that it is prepared to be an accessory after the fact to criminal activity, via the AFR:
The Reserve Bank of Australia and Treasury have privately cautioned the Morrison government that any regulatory response to the financial services Royal Commission must be careful to avoid putting the brakes on lending to home buyers and business.
The advice from two of the country’s top financial policy agencies appears to partly explain why Treasurer Josh Frydenberg has signalled he must balance cracking down on nefarious misconduct in the industry and ensure credit keeps flowing to borrowers to grow the economy.