What next from the lunatic RBA?

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The Deflation Bank of Australia faces a conundrum, via The Australian:

The RBA is facing up to the reality that a review of its economic forecasts on May 10 will include cuts to both its GDP growth and inflation forecasts, sharply eroding any optimism it might retain about the economic outlook.

Still, the impact on variable mortgage interest rates should be swift, as significant falls in wholesale funding costs over recent months would give banks little option but to pass on the cuts in full.

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About the author
David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal. He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.