Phil Lowe and the RBA’s toxic optimism rolls on:
- says GDP outcome was broadly in line with our expectations
- weakness of consumption was a surprise
- still confident people will spend extra income
- says evidence is people will spend tax rebates, may take longer this time
- says weakness of Q3 consumption does not have particular messages for future
That’s pretty deluded given tax cuts clearly resulted in higher saving instead. Nor have consumers spent any new housing wealth as positive equity injection surges. In part thanks to the RBA using up nearly all of its households debt insurance policy in an exhausted cash rate.
