Australian interest rates

The RBA has made clear that it will not tighten monetary policy until such a time that inflation is sustainably within its 2-3% target.

There’s revolution brewing at the ABC.

In Australia, it just doesn’t do to tell the truth about our ruling classes.

As usual, the accelerated COVID business cycle that we have dubbed the Amphetamine Cycle, is moving at a lightening pace.

Capital Economic on the minutes: The minutes of the latest RBA meeting emphasised that the economic recovery has further to run before the RBA will be satisfied which supports our view that the Bank will announce another extension to its QE programme in June.

TS Lombard with the note: In a recent podcast, the influential MMTer Stephanie Kelton claimed victory in the debate about fiscal policy, suggesting the US Congress was now taking her advice.

And the world turns!

Here’s what the RBA said at its last meeting: The Board remains committed to the 3-year government bond yield target of 10 basis points.

As much of the press tips into phony handwringing over house prices again, even as it relies entirely on the bubble for its only source of profit growth, Chris Joye is having none of it.

Nordea with the note: There was broad support for the ECB to increase the pace of its bond purchases, but that support may wane, as the economic situation improves.

Markets clearly think it’s coming very fast.

God bless COVID-19. After years of battling a kind of corporate wokism that was designed to destroy Australian wages via immigration (cheered on by an idiot fake left) the reality of life without mass immigration is forcing everybody to shift.

If you ask Goldman Sachs then rising yields will never hurt equities.

For years we have been pounding away at the need for a comprehensive review of the structure of Australian monetary policy.

The RBA yesterday gave a quiet warning on house prices when it noted that it said it “will be monitoring trends in housing borrowing carefully and it is important that lending standards are maintained.” It does not take Einstein to see where that ends up eventually.

No change to the uber-dovish RBA: At its meeting today, the Board decided to maintain the current policy settings, including the targets of 10 basis points for the cash rate and the yield on the 3-year Australian Government bond, as well as the parameters of the Term Funding Facility and the government bond purchase program.

As we know, the Australian Prudential Regulator, APRA, is corrupt.

Alan Kohler has published a detailed article at The ABC decrying the impact that record low deposit rates is having on retirees, claiming that “retirees are collateral damage” in the Reserve Bank of Australia’s (RBA) war against low inflation: I think retirees are mostly just collateral damage in the war against low inflation.

Former RBA board member John Edwards is on the hustings today going brrrrrrr… Edwards sees AUD at 80 cents. The RBA will keep printing so long as the AUD is high enough to constrain the recovery (which, in my view, is anything above 60 cents).

Bill Evans at Westpac: Westpac has revised up its profile for the RBA’s Quantitative Easing Program. We now expect the new program which starts in April to be followed by a further $100 billion (up from our earlier forecast of $50 billion).

Mwahaha.

Crikey these markets are radical.

The AFR is today reporting that house price controls are imminent from regulators: Apparently “pressure” is building on the RBA to slow house prices though from where that pressure is coming the article does not say (because let’s face it, there isn’t any).

It is fascinating to watch macro analysts diverge into three distinct narratives covering the future of this business cycle.